TRENTON, N.J. (12/16/13)--Legislation to expand New Jersey's Credit Union Advisory Council to seven members and provide for representation of federally chartered credit unions passed the state Assembly's Financial Institutions and Insurance Committee by a 7-0 vote Thursday.
The bill expands the CUAC from five members. It designates that no fewer than four seats be held by representatives of state-chartered credit unions, and no fewer than two seats can be held by representatives of federally chartered credit unions, said the New Jersey Credit Union League (The Daily Exchange Dec. 12).
The legislation will now move to the full assembly for a vote. If it is approved there, it will go to Gov. Chris Christie for signature.
Christie's signature is not a certainty, even if the legislation passes the assembly, said Christian Abeel, league director of government affairs.
"The governor has had an initiative to consolidate boards like this to save taxpayer dollars," Abeel told News Now. "We argue that this board is funded by credit unions so it doesn't cost the state money."
Earlier in this legislative session, New Jersey credit unions persuaded legislators to squash a plan that would have replaced CUAC with a consumer finance advisory board, where only two of nine seats would be held by credit union representatives.
The CUAC was established through legislation enacted in 1984 as a vehicle for state-chartered credit unions to advise state government on credit union-related matters. Members are nominated by the governor and must be confirmed by the state Senate.
"The original council was to advise was really focused on state-chartered credit unions," Abeel said. "Since 1984, there has been so much more regulation, but regulation by activity, so that a federally chartered credit union in New Jersey, while exempt from some New Jersey law and regulation, is still subject to others, particularly in the area of mortgage lending and collections. So while the state is not the primary regulator by charter, it is a regulator by activity, and not all of these activities are pre-empted."
Federally chartered credit unions may be exempt from some state laws and regulations, but certain activities, such as mortgage lending and collections, are subject to state regulation, Abeel said.
The newest CUAC bill recognizes that federally chartered credit unions, though primarily regulated by the federal government, are also subject to numerous state laws and regulations and should have a voice as well.
The Senate bill passed by a 38-0 vote in November.