State-chartered credit unions will get expanded powers to offer new services and ease operational restrictions under a credit union reform bill passed by the state legislature in the final days of this year's session.
The bill, the first major rewrite of the state's statute since 1987, will allow state-chartered credit unions to set up student-run branches in schools, accept probate guardianship funds, ease restrictions on short-term loans, and facilitate electronic board meetings and voting, among other things.
But the credit union lobby was forced to leave out several other provisions it had originally sought, some of which have been approved in other states. Among them are the ability to offer limited services, such as check cashing and wire transfers to non-members within a field of membership; the authority to offer trust services; the ability to accept municipal deposits, and the power to issue secondary capital.
Careful Craftmanship
John Kozlowski, general counsel for the Ohio CU League, said the bill, which lawmakers approved in an unusually swift two-year effort, was carefully crafted during negotiations with top legislators, state regulators and the banking lobby. "The way the legislative process works, you basically have to sit down with the legislative leaders, the regulators, and you talk to all the interested parties," said Kozlowski. "We sat down and talked many times with the bankers."
The final bill expressly authorizes the use of electronic commerce, such as electronic statements and digital signatures; clarifies that records can be kept electronically; eases the ability of state chartered credit unions to offer tax-deductible Health Savings Accounts, and amends 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.
It also includes an interesting provision allowing 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.
The bill, which is expected to be signed into law by Gov. Robert Taft in the early days of 2006, will apply to the state's 215 state-chartered credit unions.
