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League advocates and the statehouse 2011 and 2012
WASHINGTON (1/11/12)--Hundreds of bills impacting credit unions were introduced in state legislatures last year, according to information collected by the Credit Union National Association's (CUNA's) State Government Affairs staff from leagues' governmental affairs staff.  As states begin their legislative sessions for 2012, leagues will have more opportunities to promote and protect credit unions at their statehouses, with CUNA working to support their efforts.

This year most state legislatures will convene new sessions by the end of January, six states start in February and one in March.

Montana, Nevada, North Dakota and Texas do not have a regular legislative session this year. Even though some states won't have a legislative session, league government affairs staff still will work with legislators and legislative staff.  For example, although Texas is not in regular session this year, the Texas House of Representatives is studying and will make recommendations on the business tax structure, including any tax exemptions during the interim.

During 2011 state legislative sessions, leagues actively engaged in promoting and protecting credit unions' interests.  Among the year's highlights:

  • Tight budgets caused many states to consider repealing or suspending certain tax exemptions to raise additional revenue.  State tax exemptions for credit unions were mostly untouched, but leagues indicated they remain vigilant to protect credit unions' tax treatment.
  • Many states considered reforms to their foreclosure process; however, few measures were enacted. Leagues were active in shaping legislation that did pass.
Several states saw favorable changes made to their credit union acts. They include:

  • California, which created parity between federal and state charters regarding loans to credit union officials;
  • New York, which now allows state-chartered banking institutions--including credit unions--to apply for federally permitted powers and expedites the time period that regulators have to consider these applications;
  • North Carolina, which now permits a state-chartered credit union to own and operate an insurance company to benefit its members;
  • Missouri, which saw a number of improvements such as confidentiality provisions to protect information obtained during examinations; and
  • Oregon, which saw a number of changes including ones related to mergers of credit unions.
Other states capped 2011 with these efforts:

  • New Jersey, Oregon and Illinois made progress to enable or expand public deposit authority for credit unions.
  • Prize-linked savings legislation passed in Nebraska, North Carolina and Washington.
  • Financial literacy measures moved forward in California and Virginia.
  • Several states, including Arizona, Hawaii and Oregon, considered legislation establishing a state bank, like the Bank of North Dakota. None succeeded in passing.
  • State interchange bills introduced in a number of states such as Maine, Massachusetts, Minnesota, Rhode Island, and Oregon were not successful.
  • Although strongly opposed by the Wisconsin Credit Union League, a last-minute addition to the state's budget bill allows Wisconsin credit unions to directly convert to banks.
While 2011 saw changes and progress, the coming year will bring more opportunities to advance credit union interests in state legislatures.  Issues that leagues will address in 2012 include:

  • Foreclosure. As a result of the crisis in foreclosures, several states such as Hawaii, Georgia and Maine will continue to address issues related to changes in mortgage foreclosure laws.
  • State banks. Several states, including Arizona, Hawaii and Maryland, will likely consider further legislation to create a state bank.
  • Tax reform. Leagues will continue to monitor tax reform efforts to ensure proposed legislation does not impact credit unions' exemptions.
  • Credit union Acts. At least two states --Alabama and Illinois--plan to update their credit union act.
  • Public deposits. Alabama and Florida will take up legislation to allow its credit unions to accept public deposits.
  • Prize-linked savings.  After its success in Washington state last year, the Northwest Credit Union Association is set to lobby for prize-linked savings in Oregon.
With the enhanced activity this year on credit union issues in state legislatures nationwide, one of CUNA's priorities is to work with leagues in highlighting their work in advocating for, promoting and defending credit unions at the state level. For more information, use the link to CUNA's State Government Affairs.


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