A major bill that would modernize the California state
credit union charter, A 2274, passed its final legislative hurdle in the state
Assembly by a vote of 66-0 yesterday. This bill is the culmination of efforts by
the California Credit Union League’s State Charter Review Committee and is now
on the desk of Gov. Jerry Brown, who will need to sign the bill before Sept.
30. If signed, the provisions will go into effect Jan. 1.
The legislation modernizes the state charter by:
1) Allowing
member business loans to exceed a member's deposits;
2) Eliminating board
approval of membership applications;
3) Allowing for an audit committee in lieu
of a supervisory committee;
4) Allowing non-members to act as co-borrowers,
surety, or guarantors of a loan made to a member;
5) Redefining which credit
union officials' loans are subject to certain limitations and are required to
be reviewed by the board;
6) Allowing credit unions to decide whether their boards
need to meet on a monthly basis, or if they should opt to meet less often based
on the needs of the credit union; and
7) Removing unnecessary loan
documentation requirements.
Throughout the legislative process, this measure was well
received by lawmakers as it passed through the Assembly Banking and Finance
Committee with a vote of 12-0, Assembly Appropriations Committee (20-0),
Assembly Floor (79-0), Senate Banking and Finance Committee (7-0), Senate
Appropriations Committee (7-0), and the Senate Floor (38-0).
With eight days left in the California Legislative Session,
the league is focused on other credit union-related bills including measures
regulating property accessed clean energy (PACE) loans and unclaimed property.