LANSING, Mich. — The Michigan Credit Union League (MCUL) said the state's House of Representatives passed a six-bill package on Wednesday that will modernize the Michigan Credit Union Act (MCUA) for the first time since 2003.
MCUL said that the six-bill package (House Bills 5017-5022) received "overwhelming bipartisan" support and contains various measures designed to provide regulatory relief, including eliminating fixed-asset limits for well-capitalized credit unions and updated IT vendor-contracting requirements, among other items. MCUL explained that updates to the existing MCUA would make it easier for credit unions to operate by providing regulatory relief and the elimination of limitations on loan prepayment penalties, among other provisions.
"[The] passage by the House was a step forward for Michigan credit unions, but more importantly it will benefit credit union members across the state," said Ken Ross, EVP/COO of the MCUL, in a statement. "Our Government Affairs team worked very closely with [House Financial Services Committee] Chairman Tony Forlini and members of the State House as they vetted these bills, and we look forward to working just as closely with their Senate colleagues as we work our way through the process."
MCUL CEO Dave Adams stated in a "priority report" that the batch of bills would "modernize credit union regulations for the first time in more than a decade by providing regulatory relief and putting more control in the hands of credit union boards and management."
For example, the bills will seek to clarify the use of examiner "best practices" by requiring that any of these suggestions be placed in a separate addendum — not in the exam findings. "By putting items not required by law, regulation, or safety and soundness in an addendum, it helps clarify what is a requirement and what can be left up to the business judgment of the credit union's board and senior management," Adams explained.
In addition, the bills propose the creation of a "credit union regulatory fund" which is designed to protect their operating fees.
"We want to also increase the number of areas where boards of directors can delegate routine matters to senior management," he added. "We're [also] proposing that boards only be required to meet six times a year instead of nine. This would bring us in line with our banking counterparts here in Michigan."
The league said its government affairs team will begin working with state senators on the bills after the New Year.
"These bills passed unanimously out of the House Financial Services Committee and received overwhelming bipartisan support from the full House, so we're confident that they'll be well received by the Senate," MCUL added. "We expect that this package of bills will be ready for [Michigan's Republican] Governor [Rick] Snyder's signature by Easter.
