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California bill prohibits FIs from spending
SACRAMENTO, Calif. (3/4/09)--A California bill that would prohibit financial institutions--including credit unions--from using federal or state emergency economic assistance for certain purposes was introduced in the state Assembly Friday. State Rep. Pedro Nava (D-35), chairman of the state Assembly Banking Committee, introduced Assembly Bill 1075. The bill states: A credit union, or any subsidiary, that is a recipient of federal or state emergency economic assistance shall not use any funds derived from that assistance for:
* Lobbying expenditures or political contributions; * The hosting or sponsorship of, or payments for, conferences and events; * Corporate aircraft, travel accommodations, and travel expenditures; * Mergers or acquisitions; * Office or facility renovations or relocations; and * Entertainment, holiday parties, employee recognition events, or similar ancillary corporate expenses.”
Any credit union that violates the provision will be subject to a civil fine of at least $100,000 per violation and shall be ineligible to receive any future emergency economic assistance until the credit union completes measures to comply with, and to prevent future violations of, the provisions. Fines collected will be deposited in the state Credit Union Fund. Similar provisions in the bill apply to banks. The California Credit Union League will have a committee meeting in two weeks to review A.B. 1075, and currently has taken no position on the legislation since it is so new, Melissa Ameluxen, league director of state government affairs, told News Now. “If the bill prevents credit union people from exercising their freedom, we might be against it,” she said. “However, a lot of items in the bill sound reasonable. “No California credit unions have received federal government TARP [Troubled Asset Relief Program] money,” she added. “Credit unions in California and Nevada have spent money wisely--keeping the best interests of their members in mind. And the credit unions will continue to do so--even if they do receive TARP money.”
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