Removing Barriers Blog

Notable State Action- Week of January 29, 2016
Posted January 29, 2016 by CUNA Advocacy

Earlier this week, both the Wisconsin Credit Union League (The League) and the Indiana Credit Union League (ICUL) successfully introduced legislation that would improve the regulatory environment of state credit unions.  

In Wisconsin, a credit union act modernization bill, A 807, was crafted collaboratively over a year’s time with guidance from credit union representatives and input of other stakeholders, including the state regulator.

The measure provides clarity and greater transparency for credit unions by:

  • •Replacing an approval process for new or relocated ATMs with a notification process;
  • •Giving the regulator the discretion to accept a federal examination for purposes of satisfying the 18 month exam requirement;
  • •Allowing credit unions to establish the amount of charitable contributions they make;
  • •Addressing the ramifications of a director's conflict of interest; and
  • •Creating the right of members to gain access to non-confidential credit union records.

The League anticipates companion bill will be introduced in the Senate next week.

Currently, Indiana law places restrictions on how loans can be made to individual officers of state-chartered credit unions, including an aggregate limit on how much money an officer can borrow from the credit union. The language is based on a similar federal regulation that applies to all national and state banks and thrifts (the Federal Reserve Board’s Regulation O). The aggregate loan limit is essentially $100,000 with a few limited exceptions like first mortgages and loans for the education of the officer’s children. While the limitations under Indiana law apply to officers of state-chartered credit unions and the similar Regulation O limitations apply to all banks and thrifts, officers of federal credit unions do not face the same limitations and are able to borrow significantly more from their credit unions. ICUL argues that this limit is outdated and needs to be increased to account for inflation is advancing a bill, S 242 that would change the law to reflect the inflation-adjusted loan limit.