State-chartered credit unions would obtain expanded powers to offer new services and ease operational restrictions under credit union reform bills introduced in the state legislature last week.
The bills would allow credit unions to: establish student-only branches in schools for the first time; offer check cashing and wire transfers to non-members within their fields of membership; expressly authorize the use of electronic commerce, such as electronic statements and digital signatures; and ease the state's parity requirements by allowing the superintendent of banking to set parity with federal standards administratively, instead of through the laborious public hearing process.
The bills would also establish safety and soundness as the sole criteria for approving field of membership expansions, which are currently approved using a variety of standards.
They also have several interesting provisions. For one, they would allow credit unions to accept probate and guardian accounts, just like banks. They would also allow a credit union to apply with the Secretary of State to designate any person to act as a police officer at their premises, which is currently allowed for banks and savings and loans. That person is granted authority as a law enforcement agent.
But the credit union lobby decided to eliminate several provisions that were in last year's bill because they feared those provisions could create barriers to final passage, according to John Kozlowski, general counsel for the Ohio CU League, who helped draft the proposal. Among them were the ability of credit unions to accept municipal deposits; to establish trust departments; and to offer secondary capital.
"We just felt that it wasn't the right time for some of these things and decided to leave them out," said Kozlowski.
Kozlowski said he expects the banking lobby to oppose the bills, as it did last year, when the bill died before being voted on.
The bill would apply to Ohio's 220 state-chartered (out of 520) credit unions.
The two bills, introduced in the House and Senate, are similar. Kozloswki said he expects lawmakers to hold hearings on the proposals over the next few weeks. If passed, the bills would be the first major reform of the state's credit union statute since 1987.
