Raleigh, North Carolina, USA
In a decisive 41–1 vote, the North Carolina Senate on June 26 rejected Senate Bill 595, a comprehensive revenue law package that included significant reforms for state-chartered credit unions. The bill had previously passed the House but faced strong opposition from the banking industry, particularly the North Carolina Bankers Association (NCBA), which argued that the proposed changes would grant credit unions unfair competitive advantages.
The legislation aimed to modernize credit union operations by expanding membership eligibility to include individuals and families earning at or below the federal poverty threshold, as well as residents in areas more than eight miles from a bank branch. It also sought to enhance the regulatory authority of the Administrator of Credit Unions, allowing for the issuance of cease and desist orders, removal of credit union officers, and imposition of civil penalties up to $500 for violations. Additionally, the bill proposed allowing credit unions to offer expanded financial services, such as safe deposit boxes, custodial services, and electronic fund transfers, and to invest in small businesses developing fintech products, with investments not exceeding 1% of the credit union's net worth.
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The NCBA contended that these provisions would effectively transform credit unions into tax-exempt banks, providing them with competitive advantages without subjecting them to equivalent regulatory oversight. In a statement, the association expressed concern that the bill would allow credit unions to serve virtually anyone, deviating from their original mission to assist individuals of modest means sharing a common bond.
Some legislators viewed the inclusion of the credit union provisions as a "poison pill" that jeopardized the broader revenue law changes. As a result, the Senate rejected the House's version of the bill, leaving the proposed credit union reforms unimplemented.
With the Senate's rejection, the proposed changes to credit union regulations in North Carolina remain unadopted. Future legislative efforts may revisit these reforms, but as of now, the state's credit union laws continue under existing statutes.
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Michael Ogden
Editor-in-Chief at CU Times. To connect, email at [email protected]. As Editor-in-Chief of CU Times since 2016, Michael Ogden has led the editorial team in all aspects of content strategy and execution, including the creation of the publication’s exclusive and proprietary research database of the credit union industry’s economic landscape. Under Michael’s leadership, CU Times has successfully shifted to an all-digital editorial product with new focuses on the payments, fraud, lending and regulatory beats. Most recently, he introduced a data-focused editorial product for subscribers that breaks down credit union issues into hard data, allowing for a deeper and more factual narrative for readers. In 2024, he launched the "Shared Accounts With CU Times" podcast, which offers a fresh, inside-the-newsroom perspective through interviews with leaders from the credit union industry and the regulatory world. He dives into pressing credit union issues, while revealing the personalities working behind-the-scenes to push the credit union world forward. His background includes years as a radio and TV anchor/reporter and a public relations and digital/social media manager, where he covered the food and music industries, as well as cooperatives and credit unions. Over the years, he has launched numerous exclusive video and podcast series, including a successful series of interactive backstage interviews with musicians at music festivals, showcasing his social media and live streaming production skills.
