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At the behest of the credit unions leagues in Maine and North Carolina, bills granting credit unions parity were passed by legislatures in both states and now await signatures from the governors.
Prompted by the growth of credit unions in Maine, H. 738 requires that any out-of-state credit union that establishes a branch in the state must comply with all the statutory provisions that Maine credit unions comply with. This ensures that all state-chartered credit unions operating in the state adhere to the same regulations.
Currently, Maine state chartered credit unions must have a percentage of gross income set aside before there can be a dividend payment to a member. To grant state chartered credit unions parity with federally chartered credit unions, the legislation repeals the guaranty fund requirements and instead allows dividend payments when the credit union establishes and maintains adequate levels of net worth. The bill further directs the regulator to adopt rules regarding the composition of net worth, the levels that must be maintained, and procedures that must be followed to restore net worth if it falls below the minimum standard.
To further grant parity with federal credit unions, the legislation raises the percentage that credit unions can invest in real estate and fixed assets from 50 percent to 60 percent of its total surplus.
Another parity provision of the bill, directs the regulator to consider federal legislation and regulations when determining whether a new credit union service corporation “primarily serves” a credit union or credit union members. It also removes requirements that credit unions notify the regulator in writing ten days prior to organizing as or investing in a CUSO and that permits the regulator to prescribe the manner and form of the books and accounting of CUSOs.
Governor Le Page has until July 3 to sign the bill.
In North Carolina, Governor Cooper is also considering a credit union parity bill. The measure clarifies that credit unions can hold certain escrow and bond accounts like banks.
The legislation would also enable the regulator to conduct state chartered credit union examinations every 18 months replacing the current annual examination schedule. If the bill is enacted, the regulator may still review any credit union at any time, but it increases the minimum frequency to an 18-month basis, mirroring, the bank examination time frames.
Governor Cooper has until August 4 to sign the bill.
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