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MONTPELIER, Vt.-With H.149, Vermont’s modernized credit union legislation, officially becoming law at 12 a.m. on July 1, 2005, state-chartered credit unions now are eligible to participate in a variety of new services and procedures ranging from business lending to expanded fields of membership. Although there was little or nothing the state’s CUs had to do in preparation for July 1, they are expected to experience some semblance of a learning curve until they become more familiar with the new regulations. “The great thing is that credit unions will have time to think carefully about all of it and determine what they want to take advantage of and what they don’t,” said Joe Bergeron, president and CEO of the Vermont Credit Union League (VCUL). In anticipation of the July 1 start date, the VCUL hosted two three-hour information sessions with the state regulator at the end of June. Following is a summary of several key options now available to Vermont’s CUs: * Business Lending-Until H.149, Vermont was one of the only states to not allow loans to businesses in a credit union’s field of membership. Instead, state CUs made business purpose loans to individual members who were responsible for repayment. Approximately five years ago, state law was modified to allow business lending by the state’s one community development CU. According to Bergeron, two state-chartered CUs who were interested in business lending have since converted to federal charters, but he anticipates direct business lending to replace business purpose loans in time. * Interstate Branching-Contingent upon approval by the state regulator, CUs will be allowed to open branches in other states. This provision is of particular interest to CUs whose fields of membership cross the Vermont/New Hampshire border, Bergeron says. New Hampshire also allows interstate branching but required reciprocity from neighboring states. * Committee Restructuring-Vermont CUs now have the option to replace their credit committee with a credit manager or a loan officer. CUs also may create an executive committee consisting of at least three members of the CU’s board of directors that can act on behalf of the board. Board meetings may be reduced to six meetings per year, and board members must be physically present for at least one meeting. Otherwise, they can participate by conference call. * Expanded Membership-H.149 clarifies existing legislation allowing state-chartered CUs to serve both select employee groups and community fields of membership. Through SEG memberships, state CUs also may serve employees of the SEG and their family members who live in other states. This is one advantage Vermont’s state-chartered CUs have over federally chartered CUs, which are not allowed to serve both types of members. “It’s always been in the law but wasn’t 100 percent crystal clear,” Bergeron says about the dual membership. “It is now.” Beyond these specific changes, the Vermont legislation offers a wholesale modernization of its CU law-resulting in parity with federally chartered CUs. “With the advent of this law, there’s nothing that federal credit unions can do and state-chartered credit unions cannot,” Bergeron says. [email protected]

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