It’s been four years now since lawyers from CUNA and the American Association of Credit Union Leagues drafted a so-called "Model Credit Union Act" for implementation by the leagues. But the 2011 project is off to a quick start with bills ready for introduction in several state legislatures.
"I guess you could call us the stewards of the state charter and on that we try to ensure that credit union laws are kept current to the times," explained Michael Lanotte, chair of the 2011 model credit union act working group and senior vice president/general counsel of the New York Credit Union Association.
The newest version, parts of which could within days get dropped into the hoppers of the New York legislature, reflects best practices and industry trends covering a wide spectrum ranging from field of membership issues to secondary capital concerns, said Lanotte.
He explained that their goal was to build flexibility into the model act so that individual leagues could draw elements they might need depending on their own state environment and CU structure.
The 72-page act was written, noted the authors, "to help frame issues and initiate discussions within the credit union system and among public policymakers."
The document also provides model language for leagues as they develop bills "taking into consideration the unique economic and political factors" in each state, said the authors.
"Please note that the model language should be viewed in the context of existing state law and edited appropriately," the writers warned.
In addition to Lanotte, other members of the working group, all general counsels for their leagues, are Stacy S. Augustine, Northwest Credit Union Association; Mary Ann B. Clancy, Massachusetts Credit Union League; and John F. Koz-lowski, Ohio Credit Union League. Assisting from the CUNA staff was Richard Dines, director of league relations.
In several key areas, such as low income membership and interstate branching, the 2011 Model Act reflects new conditions and revisions to the 2007 version, noted Lanotte.
"We made changes in membership powers as they relate to regulation and supervision, recognizing the ability of credit unions to expand and reach out to low-income markets," said Lanotte. The model law provides the framework to expand at the state level through changes in low-income definitions.
The model law also covers the mix and match charter provisions aimed at lifting restrictions on CUs moving into community charters or combining multiple SEG groups. "There is simply a broader definition of community," said Lanotte.
One other new area also focuses on the ability of CUs to cross state lines and operate in multiple jurisdictions, said Lanotte, noting that old laws turned out detrimental to credit unions on operational issues relating to CUs competing outside of their domiciled states.