ATHENS, Ohio – Credit unions in Ohio are moving ahead with a package of regulatory and legislative revisions to keep credit unions in the state growing. The Ohio Credit Union League is putting the finishing touches on a yearlong review of the state credit-union code to improve operations in a dozen areas. Chief areas of concern are member business lending, parity with federal credit unions and depository issues. These changes are the product of a task force of 10 credit union CEOs. The Ohio Law Task Force held six focus groups of credit union officials to identify short-term and long-term priorities for regulatory and legislative changes. The survey asked credit unions to rank the 12 areas identified as important by the focus groups. Meyer said officials from the Ohio Division of Financial Institutions attended all of the focus group sessions. John Florian, chief operating officer of the OCUL, said he expected that 80% of the issues could be handled by regulatory changes and that the regulators he's talked to have been receptive. "We're getting a strong sense of concurrence from the division on these changes," he said. "Our targets line up very well to their targets." Ken Roberts, acting deputy superintendent of ODFI who supervises credit unions did not return several calls at press time. Phil Meyer, CEO of Ohio University Employees Credit Union in Athens and chairman of the task force, said that after the focus groups and survey were complete, his task force identified 12 issues that would improve credit union operation. The task force divided those up into short-term priorities, long-term priorities and areas in need of further research. Chief among the short-term priorities, Meyer said, were member business lending, field of membership issues, depository issues and parity with federal credit unions. Under current regulations, Ohio credit unions must have specific authority and specific member business lending policies in place to make business loans of over $25,000, now less than the cost of a truck purchased for a lawn-mowing service, Meyer said. The task force wants to expand that lending authority, probably to $50,000. Meyer also said the task force recommended a legislative change that would allow public authorities to place deposits in credit unions. "In rural areas," he said, "we've got public agencies saying `You're the only game in town, we'd like to make deposits with you.' " He described this depository issue as a short-term issue, but acknowledged that it is " also politically the most difficult issue, (so) it's not realistic to think short term." Karen McNamara, president of Greater Cleveland Firefighters Credit Union and another task force member, supports the task force recommendations and is particularly supportive of the move towards parity with federal credit unions. "Having parity with federal credit unions is important to us," she said and cited one of the task force's concerns that could be resolved with parity. She said the state's requirements for full property appraisals makes some real estate loans more expensive for state-chartered credit unions. As for field-of-membership expansion, Meyer sounded unenthusiastic about following the lead of Michigan credit unions, which are pushing for credit unions to be able to self-designate their FOMs. "It's not all that bad right now," he said, while noting that "I think there are some credit unions out there saying, `We want to serve anybody we want.' " Meyer's perspective, though, is from someone at a credit union serving SEGs that allow him to cover most of his county. " Eighty percent of Athens County is able to join (OUECU)," he said. "A community charter would add 20% and destroy my relationship with (Ohio) University." McNamara agrees. "Personally, I think they're pretty lenient right now," she said. Other issues to be addressed in the short term included reimbursement of director expenses, CUSOs and investment authority. Meyer said getting parity with federal credit unions could largely resolve the CUSO issue, which chiefly concerns the amount of money a credit union can invest in a CUSO. "Federal credit unions can invest 1% (of capital) into a CUSO," he said. "I had to get ODFI approval to invest $100,000." OUECU is a $140 million credit union. Among the subjects requiring longer term solutions were alternative capital, trust authority and incidental powers. "I think what we really want on incidental powers is a clearer definition of what we can do," said Meyer. "Basically, if you talk to the state, they'll say, `You can do anything you want as long as we approve it. Why do you want to define it?' " Meyer answered his own question, saying that while the current relationship is very good, credit unions have to look down the road into the unknown. Meyer said the league has not set a timetable for advancing these issues in Columbus, the state capitol nor is he ready to predict how successful the effort will be, acknowledging that the political election season ahead could delay things, as could the banking industry. " The task force members and league staff recognize that a number of factors could affect our ability to achieve the desired results for Ohio's credit unions," he said. "We didn't, however, let these outside elements prevent us from establishing our goals and setting priorities. We'll deal with any impediments as they come along." [email protected]

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