<p>WASHINGTON – After two-and-a-half years, the members of CUNA's Model Credit Union Act Task Force can finally take a deep sigh and congratulate themselves for completing what turned out to be the most extensive updating of the association's Model Credit Union Act. The last time the Act was updated was 1986. "The financial services industry has changed so much since then, it's become so much more prominent in consumers' lives," said CUNA's Vice President of State Government Colleen Kelly. "Updating the Model Credit Union Act required us to dissect the last version of the Act. We went through it with a fine tooth comb, it was an exhaustive process." In total, Kelly estimated the seven-member Model Credit Union Act Task Force had about 17 conference calls and spent over 45 hours debating provisions of the Act. As part of the process, each member of the task force was asked to give their input on each of the more than 100 provisions of the bill, then their suggestions and explanations were sent to leagues and state regulators for their comments. Once the commentaries were received, the task force revisited their own suggestions. There were three comment periods – February and September 2000, and February 2001. "That's why it took so long, it was a very tedious process," said Kelly. "The members of the task force were encouraged to think outside the box and to think about the type of environment they'll be operating in the future. It's better to invest in the future now than have to play catch up later on. Things in the financial services industry are changing so fast, credit unions don't have any choice but to evolve and provide the latest services. Members are expecting and demanding it," said Kelly. Kelly emphasized that the final document – all 193 pages of it – "are intended to be a starting point for each state league to use to customize or modify for their own state act, based on their own conditions. Each league operates in its own political and economic environment, and they have to make modifications where they decide it best suits them and their affiliated credit unions." Besides asking for comments from leagues and credit unions, the task force also invited state regulators to participate in the updating process and to offer their suggestions and comments. "When leagues introduce legislation, it's important for them to know beforehand where their regulator's red flags are and have a good idea where their regulators are coming from. Credit unions are operationally based and regulators are safety and soundness based. We strove for a balanced approach, one that allowed for flexibility for credit unions, but within safety and soundness guidelines," said Kelly. The Model Credit Union Act covers 12 areas of CU operations: supervision and regulation; formation of a credit union; credit union powers; membership; governance; member accounts; loans; investments; reserve allocations; change in corporate status; general provisions; and corporate credit unions. There is also a section devoted to definitions, and Kelly said this section was the hardest and took the longest to complete. "It's always difficult to agree on things," she said. She explained that each time a term was defined, the task force had to run the Act through the computer to search for every time the term was used. That allowed the members to make sure the definition matched all the contexts the term was used in. Not only are there new sections to the updated Model Credit Union Act from previous versions, even sections that were covered before now include additional areas. For example, under "Organization Procedure When Forming A Credit Union," some new additions include an optional supervisory committee and a provision expressly allowing the credit union board to adopt general business corporation provisions to fill in areas not covered in the Credit Union Act. In another section, "Out of State Credit Union," two options were added. The first requires commissioner approval before an out of state credit union can operate in the state; the second option requires only that notice be sent to the commissioner when an out of state credit union intends to operate in the state. The "Membership" section features some of the most significant updates to the Act. They were added "to promote the philosophical principles developed by CUNA's 1994 Field of Membership Task Force, as well as the 2001 Renaissance Commission Vision Statement. The members of the Model Credit Union Act Task Force agreed that all consumers should have access to one or more credit unions," the document reads. Kelly said the task force purposely included in the Act comments it received from leagues and regulators, even if the task force disagreed with the suggestions. It was handled that way "to get people to think about the possibilities," she said. Recalling the work the task force members put into completing the update of the Model Credit Union Act, Kelly said, "it was a learning experience." But members shouldn't get too comfortable thinking their work is done. Kelly said some members are already discussing some changes they'd like to see made. For now though, attendees at CUNA's 2002 GAC will be able to receive a copy of the newly updated Model Credit Union Act and participate in a discussion of the document at a breakout session during the conference. [email protected]</p>