LANSING, Mich. (9/25/13)--A Michigan bill that would modernize the state's Credit Union Act is being debated in the state's legislature and has drawn the attention of banks.
The proposed bill--Senate Bill 496--would allow credit unions to have a broader field of membership beyond select employee groups, which advocates say would create more competition with other lenders (Ludingtondailynews.com Sept. 24).
Credit unions, by design, have always offered the same services that banks do, David Adams, president/CEO of the Michigan Credit Union League, told the paper. Although it would update the Credit Union Act, Senate Bill 496 would not significantly expand credit unions powers, but rather it would provide regulatory relief to help credit unions remain competitive and give them more flexibility, Adams added.
However, Michigan banks oppose the bill, claiming that credit unions are attempting to become more like banks by going beyond their traditional fields of membership and saying that credit unions should pay taxes if their membership expands, said the newspaper.
State regulators are pushing the membership-qualification changes, because regulators see no value in approving membership groups anymore, Adams told the paper.
Michigan likely would not make credit unions pay business taxes because they then would switch to federal charters, the bill's sponsor Gerald Van Woerkom, a Republican state senator from Norton Shores and vice chairman of the state's Banking and Financial Institutions Committee, told the paper.
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