Lansing, Mich. – The Michigan Credit Union League & Affiliates (MCUL) announced that state legislators on the House Financial Services Committee unanimously passed a six-bill package that will update the Michigan Credit Union Act (MCUA) for the first time in more than a dozen years.
House Bills 5017-5022 will now move to the floor of the House for consideration by the full chamber after the Thanksgiving recess.
MCUL said that over the past few weeks, the committee listened to testimony from prominent credit union officials, including Ken Ross, EVP/COO of MCUL, as well as Pat McPharlin, the director of Michigan's Department of Insurance and Financial Services (DIFS).
"Today's Committee vote is a victory for credit unions, but it's only the first step," said Ross. "We'll continue pressing for these important regulatory reforms designed to reduce unnecessary burdens and improve our competitiveness."
MCUL explained that updates to the existing MCUA would make it easier for credit unions to operate by providing for, among other things, regulatory relief and the elimination of limitations on loan prepayment penalties.
Other provisions call for the modernization of requirements to permit more board delegations for routine matters and for the updating of IT vendor contracting requirements.
For instance, Dennis Hanson, president and CEO of the $1.45-billion Dow Chemical Employees CU of Midland, Mich., had testified before state lawmakers on the need to change IT requirements.
"We rely heavily on technology, as only a small fraction of our member transactions are done in the office," he said. "In fact, our mobile banking uptake was over two times the expectation in half the time. Given that online, mobile, smart and even smarter devices will only increase… credit unions like ours need flexibility to evolve the business model."
In another piece of testimony, Ross of MCUL called for the formation of a "Credit Union Regulatory Fund" in connection with regulatory fees. "As an industry, credit unions pay over $7 million into [the] DIFS annual budget, second only to insurance," Ross told the Committee. "Protecting these fees is critical so that during future state budget crunches, credit union fees aren't targeted to shore up budget shortfalls."
MCUL's CEO Dave Adams told Credit Union Journal that he is "optimistic" both the state House and state Senate will pass the legislation "as we believe the MCUA updates are not only good for Michigan credit unions but good for the state as well."
Adams added that his organization's goal is for the bills to "make it to the governor's desk by late spring."
