<p>HARTFORD, Conn. – Count Connecticut among the states with rewritten credit union acts working their way through the state legislature. Commissioner John Burke, Connecticut Department of Banking met January 22 with the chairman of the General Assembly Banking Committee on the commissioner’s proposed “Act Concerning Credit Union Modernization.” Gov. John Rowland’s Office of Policy Management has already been alerted to the bill and cleared it to go through the legislative process. Among the provisions of “An Act Concerning Credit Union Modernization,” for CUs in Connecticut, it: includes modernizing language and definitions; clarifies the process to organize a credit union in the state; provides that the commissioner will not collect assessments from newly organization CUs for three years; deletes the requirement that the field-of-membership of community Connecticut CUs be local in nature; eliminates for multiple bond CUs the requirement that the initial group be made up of less than 3,000 members; authorizes multiple common bond CUs to add select groups of less than 300 members without the commissioner’s approval, and requires the commissioner’s approval for the addition of groups of more than 300; eliminates the commissioner’s consideration of the 3,000 member cap with respect to certain applications to organize or merge; permits the election of directors by proxy or mail-in ballot if authorized by the CU’s bylaws; allows CUs to provide “reasonable” health, accident, and similar insurance protection for directors. This insurance would not be considered as compensation; authorizes them to take non-member deposits if the credit unions are designated by NCUA as being low-income CUs; deletes the 25-mile limitation on making mortgage loans; changes the lending limit from 10% of paid-in and unimpaired capital and surplus, to 10% of total assets; allows for member business loans, including those to corporate or partnership members, similar to the authority allowed by NCUA. authorizes them to join the Federal Home Loan Bank System; authorizes SCCUs to issue and sell securities that are guaranteed by the Federal National Mortgage Association or any other agency authorized under federal or state law; authorizes SCCUs to purchase private excess insurance. allows Connecticut credit unions to be sole investors in a CUSO and allows CUSOs to participate in activities other than shared service centers. The “Act Concerning Credit Union Modernization” also includes provisions concerning investments, non-express powers, capital requirements, dividend payments, losses and reduction of liabilities, bonding of officers; regulations; internal controls; shares; and branching. The proposed Act does not give SCCUs the authority to obtain private share insurance as an alternative to NCUSIF coverage. Kevin Stewart, president/CEO, Connecticut Credit Union Association said he worked closing with the banking department on the revised Act. Burke had meetings in the spring and summer 2001 with Stewart and other league officials to gather their input for the proposed Act. Stewart said the fact that the Act is a banking department bill and was not introduced by credit unions “makes it less controversial.” Because of that, Stewart said the Act has a good chance of being approved by the state legislature, and he does not expect any opposition to the Act from bankers in the state. “It’s not nice to mess with the Commissioner who also regulates the banks,” said Stewart. In addition, he pointed out that the Commissioner modernized the state’s banking act a couple of years ago, “so now it’s our turn,” said Stewart. The 90-day legislative session runs Feb. 6 through May 6. -</p> <p>[email protected]</p>

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