Michigan Credit Union Act Modernization Bill Takes First Step Toward Passage

LANSING, Mich. – A bill to modernize the Michigan Credit Union Act took its first step May 14 in what will hopefully be a short journey to becoming law. State Sen. Shirley Johnson (R-Royal Oak), chairman of the Senate Appropriations Committee, and Rep. Clark Bisbee (R-Jackson), chairman of the House Commerce Committee, introduced the measure in their respective legislative chambers. MCUL President/CEO Dave Adams said the League is “cautiously optimistic” the measure will pass without incurring any major problems. “We have gone to great lengths to lay a foundation for the bill over the past two years,” said Adams. He said the bill has the support of the state regulator, and the League has briefed key lawmakers in the House and Senate, as well as Gov. Jennifer Granholm, about the provisions of the bill. In addition, credit unions around the state have met with key legislators to garner their support to co-sponsor the measure. At press time, Adams said 20 of the state’s 38 senators had agreed to co-sponsor the bill. The legislation calls for modernizing Michigan’s existing credit union statute by removing obsolete and unnecessary provisions, eliminating barriers to the use of available technology in financial institution operations and diminishing the regulatory red tape for credit unions and the state regulator. Specifically, it would provide state-chartered credit unions with the statutory authority to determine their membership base. The current law that’s been on the books since 1925, confines credit unions to common bond fields-of-membership. The proposed bill would also allow CU to serve nonmembers by offering affordable check cashing services. Adams said the League “actively sought bankers’ input” on the measure, and “while they have a set of concerns and criticisms about provisions of the bill, they’re the types of things you’d expect from a competing industry. We remain hopeful we’ll be able to proceed with the legislation without a lot of negative opposition.” Adams added that, “Our lawmakers in Michigan understand that credit unions were on the sidelines when banks and thrifts sought to update their acts. The lawmakers have no patience for dealing with groups that complain about pieces of legislation just because it concerns their competition. The banks are astute enough to understand that, and hopefully they won’t make any problems with our bill.” Hearings on the bill are scheduled for May 22 and June 5 before the Senate Banking and Financial Institutions Committee. -