Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive

News Now

CU System
LSCU pushes for legislation on public deposits, foreclosures
BIRMINGHAM, Ala., and TALLAHASSEE, Fla. (1/27/14)--The League of Southeastern Credit Unions is getting ready for a legislative marathon. In Alabama, they state legislature begins in January and runs until March or April.  In Florida, session runs from March to May.

"It's a sprint to get legislation passed in both states," said League of Southeastern Credit Unions (LSCU) President/CEO Patrick La Pine. "Obviously, we're not the only group out there pushing for their agenda items. It's about timing and preparation. If you don't have your ducks in row by January, it can be a tough year to try to get anything done proactively."

 Among the "ducks" the LSCU has in its sights in Alabama and Florida are changes to the Alabama state credit union act and public deposit and foreclosure legislation.
In Alabama, the LSCU has been working with the Alabama Credit Union Administration to update the Alabama Credit Union Act. Among the changes the league is seeking is the addition of a wild-card provision that would give the state regulator authority to grant powers to state chartered credit unions that are available to federally chartered credit unions and other financial institutions.
The league is also pressing for explicit language to guide financial institutions on charter conversions, La Pine said. "There's really no language [for charter changes] in Alabama," La Pine told News Now. "One could argue a credit union could not convert to a bank. But the regulator could also devise its own process. One of the things that we want to do is be sure there are very clear guidelines for charter conversions, such as voting thresholds and the types of notifications that need to be given to the member so they can make a well-informed decision."
A bill that updates the Alabama Credit Union Act passed the Alabama Senate Committee on Banking and Insurance unanimously last week. While most of the changes are technical in nature and non-controversial to the banking and finance industry, the legislation is a stepping stone to further legislation within the Alabama Credit Union Act, the league said (eSignal Daily Jan. 24).
House counterpart legislation was also introduced last week. That bill could be heard in the House Financial Services Committee as early as this week.
Alabama credit unions are also seeking legislative protection from end-of-the-year Alabama Credit Union Administration funds sweeps by the state government, when money from special funds are dumped into general spending. "Like most state credit union divisions, our regulator is completely funded by examination fees from state-chartered credit unions," La Pine said. "We want to make sure that our funds are not used to supplement the general fund."
In 2011, 2012 and 2013, Florida credit unions pursued legislation that would grant them authority to accept public deposits but were stymied by fierce opposition from banks. Although the Federal Credit Union Act (FCUA) authorizes all federally chartered credit unions to accept public deposits, Florida law does not grant state governmental entities the authority to deposit funds in federally chartered and/or state-chartered credit unions.
"We have a lot of credit unions that get contacted by local units of governments that want to rate shop their deposits around, and we can't accept them," La Pine said. "We continue to gain momentum with lawmakers."
La Pine said credit unions would welcome a compromise on public deposits with Florida banks, which have not been able to have to advance their own proactive legislative agenda while they "play defense" in battling credit unions on public deposits.
The LSCU will also support legislation that would streamline foreclosures with a non-judicial process. Florida has one of the highest foreclosure rates in the country, and its courts are backlogged. "Basically, this has paralyzed the docket," La Pine said. "Even the judges are in favor of a new process. We are on the same page as the bankers on this one. Hopefully, we can get this legislation advanced."
The league also supports legislation to close a loophole in a law that allows homeowners' associations to start foreclosure proceedings against homeowners who have not paid their assessments. "It allows homeowners to sell the property for pennies on the dollar," La Pine said. "Our issue is that because of this loophole, we as the lender don't even have to be notified."


News Now LiveWire
Final field-of-membership rule tops April 30 NCUA agenda
9 hours ago
.@CUNA's @Nussle speaks to @VonnieQuinn about #StoptheDataBreaches and reg. relief.
11 hours ago
RT @NCUFoundation: .The Foundation's @hylandhighway with @NatlJumpStart President/CEO Laura Levine at #FLHillDay2015 today:…
14 hours ago
Seriously underwater homes rise, new-home sales tumble News Now:
14 hours ago
#NewsNow Cornerstone Foundation awards $71K in grants
15 hours ago