After much negotiation between lobbyists and legislators, the Senate Banking Committee passed the bill containing credit union enhancements on March 13th. This bill, H.B. 780, introduced by Rep. Bruce Williamson (R-Monroe), will enact positive changes for the industry. This legislation represents almost a year’s worth of work by the Department of Banking and Finance (DBF) and others, including the credit union charter review task force that met back in July 2017 and 2016. This task force was created specifically to generate ideas for potential improvements to credit union law, and the multiple credit union charter enhancements in this bill include:
- Expanding the section of law that protects the use of the words “credit union” to also include the name of a subsidiary of the credit union,
- Creating a process in law for state-chartered credit unions to utilize a federal power offered by the Federal Credit Union Act or NCUA that is presently in effect,
- Strengthening the liability language of directors to ensure that the director oath does not modify the standard of care or legal duties, or create a loophole where directors could be sued under a different standard,
- Outlining in law the ability to protect the ability of credit unions to hold, purchase or fund life insurance plans on any of the directors, officers, employees or others deemed as such that their death would cause a financial loss to the credit union,
- Placing protections in law for credit union director emeritus positions to ensure that they are not subject to liability standards for directors, and outlining in law the ability to create these roles, and
- Removing regulatory burdens for credit unions by eliminating the current requirement in law that all loans to employees of the credit union must be reported to the board of directors (the requirement would still hold for officers, directors, and committee members).
GCUA was engaged over the weekend to answer questions and calm some concerns that had been expressed in last week’s hearing on the bill, and was tracking down legislators to ensure there were enough to vote on the bill! We are pleased to see the bill move forward for credit unions as the situation was fluid up until mere minutes before the hearing. The bill now moves forward to Senate Rules for consideration.