ALEXANDRIA, Va. - After almost 40 years of not having a state charter and several subsequent false starts over the past three years to implement one, the District of Columbia City Council is considering enactment of a credit union act. At press time, the District of Columbia City Council's Committee...
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ALEXANDRIA, Va. – After almost 40 years of not having a state charter and several subsequent false starts over the past three years to implement one, the District of Columbia City Council is considering enactment of a credit union act. At press time, the District of Columbia City Council’s Committee on Consumer and Regulatory Affairs was reviewing the District’s proposed credit union act which was introduced in April by Council Chair Linda Cropp at the request of Mayor Anthony Williams. The proposed legislation would create a District-regulated credit union charter and “authorizes the Department of Insurance, Securities, and Banking to charter, supervise, regulate, examine and exercise other powers related to the operation of credit unions,” Mayor Williams wrote in an April 21 letter to Cropp. “Thus the Act would allow, for the first time since 1965, the chartering of credit unions under District of Columbia law.,” the mayor continued, noting that all of the almost 60 credit unions operating in the District of Columbia are federal charters. “Overall, the legislation seeks to ensure sound regulatory oversight while permitting the cooperative and democratic strengths of credit unions to grow in response to technology and member demand for services,” the mayor stated. Al Elder, a spokesperson for the D.C. Department of Insurance, Securities, and Banking said Cropp’s bill is “substantially the same” as a CU Act bill that was introduced in 2001. Elder said because of the press for time, the Council was unable to complete its work on that earlier measure. “That will not happen this time,” said Elder. Among the provisions of Cropp’s measure are: * the Commissioner’s ability to define forms of capital in addition to share accounts, membership shares, reserves, and undivided earnings. “The expanded definition will provide flexibility to credit unions by eliminating the restriction under FCUA that limits capital growth to retained earning,” Mayor Williams wrote. * permit the Commissioner to approve fields of membership without specific limitations or organizations names being placed on the form of the entity. “The expanded definitions of membership shares and shares will allow greater membership participation and enable District credit unions to respond effectively to changes in banking and member demands,” he wrote. * authorize District-chartered credit unions to conduct business outside the District. Each credit union would have the authority to serve members wherever located and to exercise power available to local credit unions, upon application and approval by the Commissioner; * permits the Commissioner to consider other non-traditional forms of organization and “interest,” and allow credit unions to serve the financial needs of an e-commerce-based group of individuals; * authorize CUs to pay payable-on-death payees. D.C. Credit Union League SVP Ed Wills submitted a written statement to the Council committee on June 24 supporting the District’s proposed CU act. He said the League supports the measure based on the importance of the dual-chartering system to all credit unions. Also on that day the City Council committee heard testimony from D.C. Commissioner of Insurance, Securities, and Banking Lawrence Mirel who told the committee that the District’s goal is to create a more friendly environment for all types of financial intermediaries, boosting District residents’ access to credit and affordable financial services. Wills cautioned that the D.C. Credit Union Act “looks destined for slow progress” because Sharon Ambrose, chair of the D.C. Committee on Consumer and Regulatory Affairs would prefer to see the measure rolled into a proposed major overhaul of all the District’s banking laws. According to the D.C. Credit Union League, the recodification of the District’s banking laws will not be “seriously considered” until 2005, “at the earliest.” But Commissioner Mirel has urged the committee to consider the CU Act separately since the legislation could be moved on now and is the product of three years worth of work Wills said the League intends to “continue to carefully monitor the progress of the Act.” -
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