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Michigan CD laws signed by governor
PLYMOUTH, Mich. (5/12/09)--Michigan Gov. Jennifer Granholm signed two pieces of legislation May 5 pertaining to the Certificate of Deposit Account Registry Service (CDARS). The new laws were backed by the Michigan Credit Union League (MCUL) and permit public schools and corporations to invest in CDARS. CDARS is a network in which financial institutions can offer more than $250,000 insurance coverage on deposits by investing them throughout a registry, thus allocating the risk among several institutions (Michigan Monitor May 11). The two bills--S.B. 195, sponsored by State Sen. Tony Stamas (R-Midland), and H.B. 4397, sponsored by State Rep. Jeff Mayes (D-Bay City)--became public acts for 2009. CDARS permits only Federal Deposit Insurance Corp. (FDIC)-backed institutions to participate in the program. While credit unions cannot participate, MCUL worked to ensure the legislation would not prohibit credit unions from accepting the deposits if they become participants in the CDARS network or if a credit union registry is created. “These new laws don’t have an immediate impact on credit unions, but we’ve looked ahead to when CDARS or a comparable program could open to credit unions--it could be a valuable move down the road,” said MCUL Executive Vice President Patrick LaPine.
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