Alabama Governor Kay Ivey recently signed into law an update to the state’s credit union act.
The updated law includes five provisions sought by the League of Southeastern Credit Unions, which serves CUs in both Alabama and Florida.
“Some of the changes were small, but two were pretty influential,” said Jason Cochran, LSCU’s senior director of governmental affairs.
The first provision of import to the trade group had to do with supervisory committees. Cochran said several of the state’s CUs had expressed a desire to expand their supervisory committees, but the state law limited committees to three members. “We had to change the law to now say ‘no less than three’ on the supervisory committee,” he said.
LSCU also pushed for changes regarding credit unions paying for “reasonable” travel or gifts to board members.
“The compensation language was not clear, especially if it was for travel to a required training,” Cochran explained. “We wanted to make sure to clarify language to allow a credit union to pay for reasonable and proper travel expenses for a board member, plus one guest, if that board member was on official credit union business – and not be considered compensation.”
The other three changes were more procedural. First, the Alabama Credit Union Administration asked the state legislature to amend the law to allow the state credit union regulator to appoint the National Credit Union Administration as conservator of a credit union – the language had not been clear previously, Cochran noted. The second changed increased the number of days for meeting notice in the case of a merger, while the third clarified language to expressly allow credit union volunteers to serve on the Alabama Credit Union Administration’s board of directors. That board currently is comprised of credit union officers, CEOs and other upper management folks. All are appointed by the governor and confirmed by the state senate.
According to Cochran, the amendment process started in March and moved swiftly as there was no opposition. The changes were passed by legislature on May 2, and signed days later by Alabama Gov. Kay Ivey.
“We are excited about it,” Cochran said. “We were really looking for those two provisions, and the legislature was very supportive. We worked with the state regulator to look at the act and see if any changes need to be made. We worked together to improve the environment for our state-chartered credit unions.”
