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The Maine Legislature voted overwhelmingly in favor of overriding Governor Le Page's veto of L.D. 1055 - An Act to Update the State Credit Union Charter. On Tuesday, the House voted 141-5 in support of overriding the veto, and the Senate voted unanimously today to override the veto.
The Governor vetoed the bill late Friday, noting that credit unions enjoy a “significant competitive advantage over banks” because of their tax status. The Maine League's legislative team worked throughout the weekend preparing to have the veto overridden. League staff met with lawmakers and issued a call to action Monday morning encouraging all credit union staff and volunteers to contact their legislators. In less than 24 hours, credit unions generated more than 2,100 calls and emails to legislators.
The passage of L.D. 1055 represents nearly a year of work by members of the League’s State Charter Task Force and grants Maine credit unions parity with out-of-state and federal credit unions.
Prompted by the growth of credit unions in Maine, the bill 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.
L.D. 1055 becomes law 90 days after the session adjourns, which likely means by late September or early October.
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