The Michigan Financial Institutions Bureau may change the regulations governing incentives, investments, and business loans for state-charted credit unions.

The regulators plans to process changes to the rules this year, so comments are due by Aug. 5.

"We want to discuss the differences between federal and state regulation and see if there's any need for uniformity," said Patrick M. McQueen, Michigan's financial institutions commissioner.

Fine-Tuning Requested

Mr. McQueen said in an interview this week that the state launched the review of its credit union rules after industry officials requested the fine-tuning.

"The purpose of this review is to determine whether amendments, additions, or deletions should be made to the rules to ensure Michigan's credit unions can meet their members' needs," Mr. McQueen said in a May 27 letter to Kenyan E. Bixby, president of the Michigan Credit Union League.

The department is inviting comment on any rule, and in the letter Mr. McQueen singled out some that were likely to be altered.

Alterations to Be Considered

Possible changes include:

* Allowing some commissions or incentives for employees.

* Increasing the minimum dollar amount of a business loan to $50,000 from $25,000.

* Requiring stricter investment guidelines.

The National Credit Union Administration is exploring federal incentive rules and has increased the business loan threshold for federal credit unions to $50,000.

The review of investment rules was spurred by "finding, on occasion, investment products and salesmen that were more sophisticated than the credit unions," he said.

Understanding Risks

"We had an institution investing in 30-year principal-only Treasury strips, and I don't think the credit union knew what it had," Mr. McQeen said. "We want to make sure credit unions understand what the risks of different investments are."

The bureau will send the new rules to the joint rules committee of the state legislature for approval.

The Michigan Credit Union League is putting together a committee to consider possible changes and will survey all state-chartered credit unions for input, said league executive vice president Marvin Umholtz.

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