On February 20th the full House passed the bill with credit union charter enhancements with a vote of 169 to 0. This bill, H.B. 780 introduced by Rep. Bruce Williamson (R-Monroe), now travels to the Senate where it will go through the same process (committees, hearings and then hopefully full Senate vote), and has 14 legislative days to do so.
This bill will help to enact positive changes for the industry and 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 (as well as 2016), orchestrated specifically to generate ideas for potential improvements to credit union law. The multiple credit union charter enhancements 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).
