Maine House, Senate vote overwhelmingly to override Governor's veto of bill to update State Credit Union Charter
June 8, 2017
Thanks to a strong, coordinated effort from the Maine Credit Union League's legislative team, credit unions and a number of legislators, the Legislature voted overwhelmingly in favor of overriding the Governor's veto of L.D. 1055 - An Act to Update the State Credit Union Charter. On Tuesday, June 6, the House voted 141-5 in support of overriding the veto, and the Senate voted unanimously today (June 8) to override the veto. As a result, the bill has been passed into law.
"This represents a big win for everyone. Since the Governor vetoed the bill late Friday, your League's legislative team worked throughout the weekend preparing to have it overridden. When the Legislature returned Monday, the team was in the State House connecting with legislators to build support for the override. Additionally, we issued a Call to Action early 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 combined efforts of all involved made a big difference, and resulted in a successful outcome. I want to express my appreciation to everyone's hard work and support in making this happen," remarked Todd Mason, President of the Maine Credit Union League.
The passage of L.D. 1055 represents nearly a year of work by members of the State Charter Task Force, our attorneys, our legislative team and many others. It was one of the League's highest priorities this legislative session. "It's fantastic to see the final result that is not only good for our state chartered credit unions, but for all Maine credit unions as it strengthens parity between the state and federal charters, and keeps the charter choice a viable option for all of our credit unions," added Mason.
The primary updates to the charter provisions for state-chartered credit unions in this bill are:
1. Putting state-chartered credit unions in line with their federally chartered counterparts by repealing the guaranty fund requirements and allowing dividend payments when the credit union establishes and maintains adequate levels of net worth. Currently, state-chartered credit unions must have a percentage of gross income set aside before there may be a dividend payment to a member. The bill directs the Superintendent of Financial Institutions 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 continue to safeguard credit union members;
2. To ensure safe and smooth day-to-day operations of state-chartered credit unions and consistent with the trend followed by credit unions in other states, allowing the manager or chief executive officer of a credit union, rather than the board of directors, to expel a member for certain types of conduct. The expelled member must be informed of the grounds for the expulsion and may appeal the expulsion;
3. Increasing the percentage of total surplus that state-chartered credit unions may invest in real estate and fixed assets from 50% to 60%; and
4. To bring Maine's state charter in line with its federal counterpart, directing the superintendent to consider federal laws and regulations when determining whether a new credit union service corporation primarily serves a credit union or credit union members and removing a general reference to a statutory provision that in itself is not specific to credit unions and instead incorporating language from that provision that requires credit unions to notify the superintendent in writing 10 days prior to organizing as or investing in a credit union service corporation and vesting the superintendent with the power to prescribe the manner and form of the credit union service corporation's books and accounts.
This bill becomes law 90 days after the Legislative Session is adjourned, meaning it will become law in late September or early October.