A Credit Union By Any Other Name? Not As Sweet In Mich.
The credit union lobby will return to the legislature in the coming weeks to ask their help in preserving the credit union brand.
The Michigan CU League hops to convince lawmakers to pass an amendment to last year's credit union reform bill to make several technical changes before the new law becomes effective June 1. Among them is a provision that would require state-chartered credit unions to retain the words "Credit Union" in their legal and trade names.
The move comes as increasing numbers of credit unions are opting for new hybrid names. Just last week, Motor Parts FCU, in Ann Arbor, Mich., announced it was changing its name to Cornerstone Community Financial, the third federal charter in Michigan to remove the words "credit union" from its name.
David Adams, president of the Michigan league, said credit union representatives and the league's governmental affairs committee agreed overwhelmingly they wanted to add the provision to the new state law as a way to help preserve the credit union brand.
"We raised the issue from a philosophical standpoint and a branding standpoint with our governmental affairs committee and they felt it was best for our industry to have some protection for that brand," said Adams. "If we see a rush away form the credit union brand it further blurs the distinction between a credit union and a bank."
The proposal would require the credit union to use the term in all its legal documents, signs and statements.
NCUA currently requires all federal charters to use the term "federal credit union" in their legal names, but allows them to use other trade names, such as Motor Parts FCU's new handle of Cornerstone Community Financial.
The league also hopes to add another technical fix to the new law, which currently prohibits state-chartered credit unions from investing in out-of-state credit unions, such as corporates not based in Michigan. Adams said unless it is changed it could limit credit unions' investment options.