SACRAMENTO, Calif. - The state Senate May 24 approved a bill sponsored by the California Credit Union League that would implement a legislative and regulatory framework for state-chartered credit unions to open branches in foreign countries. S.B. 1472 sponsored by Sen. Deborah Ortiz (D-Sacramento) also includes regulations under which the same credit unions could open branches in other states and under which credit unions in other countries could open branches in California. The bill passed 39-0. All interstate or international expansions would be subject to the approval of the California Department of Financial Institutions, as well as of the regulators in the other state or country. S.B. 1472 is the follow-up bill to A.B. 577 by Assemblyman Mike Honda (D-San Jose). That bill affirmed the legal right of California's state-chartered credit unions to serve member groups in other states and outside the U.S., with the approval of the appropriate regulators. Gov. Gray Davis signed A.B. 577 into law in Sept. 1999. Under the North American Free Trade Agreement (NAFTA), financial institutions in Canada, Mexico and the U.S. have the power to provide full financial services across one another's borders. Bob Arnould, vice president, state governmental affairs for the California Credit Union League said, "The league staff, along with a task force of credit union CEOs, are working with Sen. Ortiz and the Department of Financial Institutions to ensure that the regulations within the bill are specific to credit unions and recognize the unique nature of credit unions and are not overly burdensome, yet at the same time preserve the safety and soundness of the state's credit unions." At press time, S.B. 1472 was in the Assembly Banking and Finance Committee. -
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