2013 California (A 1282) Established a new assessment table that provides more parity between state assessments and NCUA operating fees

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Molly Bryant
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1 Credit Union Act Updates 2012 Present (By Topic and Year) Parity 2012 Arizona Provided state-chartered credit unions federal parity on rules governing the conversion of a credit union to a savings and loan association Rhode Island Allowed credit unions to purchase participation loans without regulatory approval Gave state-chartered credit unions parity with federal credit unions in the area of participation loans 2013 California (A 1282) Established a new assessment table that provides more parity between state assessments and NCUA operating fees Nebraska (L 712) Establishes parity among state and federally-charted credit unions doing business in Nebraska is extended 2016 Missouri (H 1721) Grants state CUs parity with federal CUs regarding account verification 2017 Maine (H 738) Requires out-of-state credit unions to comply with same rules as Maine credit unions Provides net worth parity with federal credit unions Permits CU CEOs to expel members raises the percentage that credit unions can invest in real estate and fixed assets from 50 percent to 60 percent of its total surplus Gives the regulator control of CUSOs 1

2 Powers 2012 California Provides state- chartered credit unions with the ability to sell negotiable checks, money orders, and similar money transfer instruments to non-members within a credit union s field of membership May cash checks and money orders and receive international and domestic electronic fund transfers from non-members in the field of membership Illinois Clarified that, in a merger, the surviving credit union is a successor-in-interest and may enforce mortgages and other loans acquired from the merging credit union Included a new authority given to the boards of state-chartered credit unions to establish age eligibility voting standards, as well as clarification of the membership status of a member if they don t have at least one fully paid share in the credit union Wisconsin Provided credit unions with the ability to make annual donations to charitable organizations up to one percent of their regular reserves, which is double the percentage per year that credit unions could contribute previously 2013 N/A Utah (S 124) Changes the Act s Utah League of Credit Unions references to bona fide trade association of authorized credit unions recognized by the commissioner Clarifies Utah credit union merger and grandfathering requirements Washington (H 2140) Modifies the rules governing credit union mergers along with those governing voting requirements 2015 North Carolina (H 511) Permits credit unions to offer escrow accounts upon a ruling by NCUA Clarifies that credit unions can invest in higher education bonds Clarifies credit union directors can be reimbursed for reasonable expenses Virginia (S 875) Removes state oversight on the placement of credit union automated teller machines 2

3 Illinois (H 2477) Amends the state rule to mirror NCUA changes that no appraisal is required when a renewal, refinancing, or restructuring of an existing loan is performed, provided that no new monies are advanced other than funds necessary to cover reasonable closing costs, or there has been no obvious material change in the market conditions or physical aspect of the real estate that threatens the adequacy of the credit union s real estate collateral protection after the transaction, even with the advancement of new monies Permits Illinois credit unions to conduct prize-linked savings raffles New Hampshire (S 188) (Governance and Investments) Clarifies and modernizes the application procedure for establishing a new credit union Provides more advantageous parity provisions Establishes new standards for directors and officers Creates new articles on meetings, branching, and mergers 2016 Arizona (H 2471) Permits director compensation Permits prize-linked savings programs Removes 5% cap on fixed assets Colorado (S 125) Permits director compensation Permits an audit committee in lieu of a supervisory committee Georgia (H 759) Permits credit unions to lend, initiate HELOCs, discuss issues with members, or address compliance issues without an attorney present Florida (H 1233) Permits credit unions access to the Federal Home Loan Bank of Atlanta s (FHLBank) mortgage purchasing program Alabama (S 209) (Investments) Modernizes investment language for state charters to permit them to invest in anything that is legal for banks; Modernizes the selection process and role of the credit committee of a credit union; Increases protections of members of a credit union in the case of a voluntary merger; and Increases the confidentiality of credit union documents and records Wisconsin (A 807) Replaces an approval process for new or relocated ATMs with a notification process; 3

4 Gives the regulator the discretion to accept a federal examination for purposes of satisfying the 18-month exam requirement; Allows credit unions to establish the amount of charitable contributions they make; Addresses the ramifications of a director's conflict of interest; and Creates the right of members to gain access to non-confidential credit union records Michigan (H 5017, H 5018, H 5019, H 5020, H 5021, H 5022, H 5251) (CUSOs) Authorizes credit unions to offer trust services through CUSOs Eliminates cap on fixed assets for strongly capitalized credit unions Protects against enforcement of examiner "best practices" Creates the Credit Union Regulatory Fund, which protects state exam fees Allows ability to offer loan promotions and provide prize incentives for refinancing loans Reduces number of required board meetings to 6 times a year Permits anyone to serve as a co-signer, co-borrower or guarantor of a loan Permits pre-payment penalties for commercial loans California (A 2274) Allows member business loans to exceed a member's deposits Eliminates board approval of membership applications Permits an audit committee in lieu of a supervisory committee Allows non-members to act as the co-borrower, surety, or guarantor of a loan made to a member Redefines which credit union officials' loans are subject to certain limitations and are required to be reviewed by the board Allows credit unions to decide whether their boards need to meet on a monthly basis, or if they should opt to meet less often based on the needs of the credit union Removes unnecessary loan documentation requirements 2017 Nebraska (L 375) Permits CUs to purchase assets and liabilities of financial institutions Permits joint tenancy w/non-credit union members Permits CU safe deposit boxes w/o regulator approval New Hampshire (S 246) Removes reciprocity requirement for credit union branching North Carolina (H 144) Clarifies that credit unions can hold certain escrow and bond accounts like banks. Enables the regulator to conduct examinations every 18 months replacing the current annual examination schedule 4

5 Tennessee (H 150) Increases from $10,000 to $15,000 the amount that a credit union may pay out of all accounts or contents of safe deposit boxes of deceased shareholders or depositors Illinois (H 1792) Permits credit union members to vote electronically Adjusts the limit on loans to members Expands the ability of credit unions to market their products and services Allows credit unions to invest in corporate bonds and loan pools Membership 2013 N/A N/A 2016 Virginia (H 874) Permits two state-chartered credit unions with unlike charters to merge provided one of the credit unions serves 35,000 or less members Formation and Structure 2013 N/A Massachusetts (H 4139) Permits branching into the states of Connecticut, Maine, New Hampshire, New York, Rhode Island, or Vermont; Expands the branching radius to 100 miles of the main office outside of the county; Contains a delayed effective date to October 1, 2015 Governance 2012 Kansas Updated areas of the act include changes to credit union committee appointment, changes to the loan approval process, and changes on how to suspend officials and members of the credit union 5

6 2013 Kansas (S 113) Amended certain limitations on loans to its directors, credit committee members, supervisory committee members and others for which the director acts as a guarantor of such loan Provided that such loans may not be on terms more favorable than those extended to other borrowers and there is no conflict of interest Tennessee (S 587) Authorized compensation for the members of the Board of Directors at a rate approved by a majority vote of the Board of Directors and the commissioner of financial institutions Texas (S 244) Increased the number of allowable advisory/honorary credit union directors from three to six Virginia (S 769) Added a definition of retained earnings to include undivided earnings, regular reserve, reserve for contingencies, supplemental reserves, reserves for losses, and other appropriations from undivided earnings as designated by management or the Regulator Washington (S 5302) Removed the prohibition on board and committee compensation and gives the state regulator authority to make rules concerning reasonable director compensation Created more flexibility for investments in real property Allowed investments in mutual funds made up of securities otherwise permitted for credit union investment Clarified that credit unions do not have to divest of an investment if it was permissible when made Alabama (H 165) Limits liability for boards of directors, new expulsion language for members of credit unions, added penalties for the fraudulent use of the term "credit union," added protections for credit unions on accounts created by minors, and increased liability protection from $5,000 to $10,000 on accounts of deceased members New Jersey (A 957) Expands the state s Credit Union Advisory Council to provide for representation of federally-charted credit unions Pennsylvania (H 2009) Permits Pennsylvania state-chartered credit unions to amend their bylaws without having to submit a petition obtained from the Department of Banking and Securities and to correspond 6

7 with its membership by facsimile transmission, , or other electronic communication after obtaining member consent 2015 Montana (S 53) Updates and clarifies credit union board of director duties and add a financial literacy component Oregon (S 582) (Powers) Permits director compensation Removes the membership share requirement for state chartered credit unions Clarifies that foster children are eligible for membership Removes the requirement that the state regulator approve new credit union branches Washington (S 5757) (Investments) Addresses credit unions corporate governance and investments 2016 Illinois (H 5755) Authorizes credit union board to amend articles of incorporation upon a two-thirds vote by the directors Authorizes development of internal corporate governance revolving around the concept of "network" credit unions are to be established 2017 Alabama (S 27) Extends exam cycle to 18 months Georgia (H 143) Creates flexibility and enhancements in the audit provisions for smaller credit unions Clarifies nonmember deposits Outlines that businesses headquartered within the field of membership may be eligible for membership in the same manner as a "person," Adds whole loans to the permissible items for investment Improves the law that governs real estate property held by the credit union Iowa (S 409) Creates a process by which the regulator can share confidential exam information with a third party (like a potential merger partner) Permits the regulator to call a meeting of a credit union board unrelated to the examination process Minnesota (H 1477) Permits alternative voting (electronic) 7

8 Oregon (H 2161) Removes meeting frequency requirement Permits board member expulsion Automatic by-law changes Washington (S 5144) Amends the Low-Income Credit Union (LICU) designation so credit unions may seamlessly qualify Streamlines responsibilities of the board of directors and permits delegation of duties to the CEO Clarifies the role of the Supervisory Committee to ensure audits are performed and financials are independently verified Eliminates the term, purchasing shares; Updates the Federal Parity Date to 2017 Clears up overlapping language in the Investment of Funds clause Member Accounts 2013 North Carolina (H 515) Removed credit union liability to joint tenants for complying in good faith with a writ of execution, garnishment, attachment, levy, or other legal process Altered the terms of joint accounts with right of survivorship Added a section governing minor s deposit accounts Added a section governing the payment of balances of deceased persons or persons under disability to personal representatives or guardians Made minor adjustments to personal agency account provisions Louisiana (SR 160) Requests that the Louisiana Credit Union League work on the development of viable loan and product alternatives for consumers who do not qualify for traditional bank loans and services North Carolina (H 1117) Conforms the law governing joint accounts in North Carolina credit unions and other financial institutions 2015 N/A 8

9 2016 Louisiana (H 724) Removes affidavit requirement for CU member beneficiaries Investments 2013 Oregon (S 520) (Parity/Governance) Changed amount of credit union assets that require credit unions to obtain a fidelity bond or irrevocable letter of credit from a financial institution and the amount of a fidelity bond or irrevocable letter of credit required Provided that state credit unions have the powers and authorities of federal credit unions, subject to certain findings of the Director of Department of Consumer and Business Services Removed personal liability of board of directors of credit union under certain circumstances Wisconsin (S 520) Modifies a dozen different areas of credit union regulations, including permitted investments and incidental powers 2015 Montana (H 550) Adds definitions and updates to conflicting language on supervisory and credit committees Removes a restriction on loans to employees at favorable rates Includes additional investment options Clarifies merger requirements Revises account verification Expands the regulator s rulemaking authority Supervisory Authorities 2013 Illinois (H 1572) Provided that the Department of Financial and Professional Regulation may assess a civil penalty against credit unions only when the Secretary of Financial and Professional Regulation reasonably determines that the credit union has committed a violation of the Act, any rule adopted in accordance with the Act, or any order of the Secretary issued pursuant to his or her authority under the Act Changed provisions concerning the Secretary of the Department's powers and duties 9

10 Nevada (A 492) Divested the Credit Union Advisory Council of any authority over the Commissioner of Financial Institutions and instead makes the role of the Council purely advisory Illinois (H 5342) Requires the Illinois Secretary of Financial and Professional Regulation maintain a consistent and fair examination protocol for the benefit of all Illinois state chartered credit unions Authorizes Illinois credit unions to share daily operational services, correspondent services and fixed assets Authorizes Illinois credit unions to establish charitable donation accounts, pursuant to a policy adopted by the board of directors Requires Illinois credit union supervisory committee members to receive annual training with respect to their statutory duties Requires each member of an Illinois credit union s board of directors to have a basic understanding of the credit union s financial statements, services and products offered to the membership, operational risks and internal control structures Iowa (S 2205) (Investments) Provides that the director of the Credit Union Division of the Department of Commerce shall not be related by consanguinity or affinity within the third degree to any person employed by a state credit union in a senior management position Provides a state credit union shall be authorized to receive payments for ownership shares, for other shares, or as deposits, from other credit unions Modifies investments in corporate bonds 2015 Washington (S 5300) (CUSOs) Updates the regulator s enforcement powers regarding credit unions and CUSOs CUSOs and Share Insurance 2013 Iowa (S 183) Allowed CUSOs to be formed as a limited liability company Permitted credit unions to send and receive international remittances Clarified voluntary liquidation procedures Wisconsin (A 58) Related to bank service corporations and credit union service organizations 10

11 Included auditing, compliance, loan documentation, administrative, technology and other similar functions performed for a bank, or any other established service that is related to the routine daily operation of banks Massachusetts (H 4112) Permits ownership of real estate, the creation of subsidiaries, and investments in CUSOs 11

Kentucky , ,349 55,446 95,337 91,006 2,427 1, ,349, ,306,236 5,176,360 2,867,000 1,462

Kentucky , ,349 55,446 95,337 91,006 2,427 1, ,349, ,306,236 5,176,360 2,867,000 1,462 TABLE B MEMBERSHIP AND BENEFIT OPERATIONS OF STATE-ADMINISTERED EMPLOYEE RETIREMENT SYSTEMS, LAST MONTH OF FISCAL YEAR: MARCH 2003 Beneficiaries receiving periodic benefit payments Periodic benefit payments