Bill to Regulate CUSOs Clears Utah Committee

SALT LAKE CITY – A bill giving State Financial Commissioner G. Edward Leary regulatory power over state-chartered Utah CUSOs seems headed for passage in the state legislature. The so-called “regulator’s” Senate bill, sponsored by Sen. Lyle Hillyard (R. Logan) and drafted by Leary’s office, passed a Senate Tax and Revenue Committee on a 7-0 vote Feb. 12. Jointed by the Utah League of Credit Unions, America First Credit Union, Riverdale, and Mountain America CU – the two CUs most impacted by the measure – said they would “work with the commissioner” to develop realistic rules governing CUSO operations. The Leary bill would deal with the “unregulated” nature of CUSOs in Utah, particularly on business lending, an area that the state claims its laws are silent on. “We can understand where the commissioner is coming from in trying to deal with an unregulated entity, ” said Brent Allen, executive vice president of America First, adding it “ it is inevitable” the state’s regulator would seek control. A lobbyist for Mountain America, however, said it had concerns the commissioner was needlessly getting into a legislative area beyond his jurisdiction. The commissioner’s responsibility “is to interpret the law” not make it, said the official.