Removing Barriers Blog

States Continue Expanding Credit Union Charters
Posted May 26, 2016 by CUNA Advocacy

Bills with new credit union powers recently arrived on the desks of Governors in Illinois, Missouri and South Carolina. These powers range from the ability to form network credit unions, to the authority to conduct prize-linked savings programs. 

In Illinois, H 5755 unanimously passed both chambers of the state legislature. If signed by Governor Rauner, credit unions will be permitted to merge to form network credit unions and credit managers can be selected a credit committee, board of directors, or CEO, rather than just a credit committee. The measure also clarifies prepayment penalties, and permits amendments to credit union articles of incorporation to be made by a majority of the members or two-thirds of the directors.

The Missouri modernization bill, H 1721, would grant state chartered credit unions parity with federally chartered credit unions by permitting state chartered supervisory committees to align their examination procedures with their federal counterparts. Currently, state charters have to do a full verification, while federal charters are only required to perform account verification once every two years, either by statistical sampling or by 100% verification. Another Missouri bill, H 2125, authorizing prize linked savings programs is on Governor Nixon’s desk as well.

The South Carolina General Assembly recently passed S 652, Saving Promotions Contests, which would allow credit unions throughout the state to offer prize-linked savings programs. After a unanimous vote both in the House and Senate, the legislation awaits Governor Haley’s signature.