NORTHVILLE, Mich. – It's been five weeks, at press time, since the Michigan House unanimously passed the state's modernized Credit Union Act, and Senate Bill 496 still hasn't been signed into law by Gov. Jennifer Granholm. But the Michigan Credit Union League isn't worried that the measure won't be signed by the governor. For one thing, said MCUL VP of Government Affairs Patrick LaPine, Gov. Granholm said she will sign the measure. Second, the measure is effective June 1, 2004, "so we're covered there," said LaPine. LaPine said after measures are passed, they have to be returned to the Legislative Service Bureau for enrollment and proofing. That's where the credit union bill is now, he said. "It's just a bureaucratic situation," he commented. The Service Bureau does not have a deadline to meet to send the bill to the governor by, but LaPine. Whenever that does happen, Gov. Granholm has 14 days from when it reaches her desk to sign it in to law. Meanwhile, the MCUL is already preparing educational sessions for credit unions on the new law's provisions and how it affects them. Among the provisions of the bill which the House passed on Oct. 23, it: * allows greater flexibility for credit unions to expand their fields-of-membership; * permits CUs to serve non-members with essential financial services such as check cashing, wire transfers, money orders, and traveler's checks; * allows CUs to offer members small, short-term loans up to $1,000, payable within 30 days; and * allows CUs to make larger investments in CUSOs. Senate Bill 496 was the first major rewrite of Michigan's credit union laws and regulations since 1986. The state Senate passed the bill Oct. 16 after the League, Senate leaders, and the Michigan Bankers Association reached a compromise agreement on the measure which entailed both credit unions and banks making some concessions on the bill, and the MBA agreeing to a `Do-Not-Oppose' position which allowed the measure to move quickly through the legislative process. LaPine said he had seen articles in some publications that discussed how the American Bankers Association was dissatisfied with the recently passed Michigan Credit Union Act -he said he had not heard from the ABA directly-but he is not bothered by their position. "It's clear, as we get closer to the bill being signed into law, that even though the Michigan Bankers Association understand what's in the bill and went through the exercise with us, that the ABA is questioning the wisdom of the compromise that was reached," LaPine said. He added that, "It's easy when you're on the outside looking in, for the ABA to criticize. But they weren't sitting at the table working at the compromise with us to know what went on. There are lots of provisions in the bill that the Michigan Bankers Association initially went ballistics over, but they eventually understood the purpose of the provisions once we explained everything to them." LaPine explained that since the bill essentially "started everything from scratch" and didn't – unlike typical bills to update laws – include any sections crossed out for deletions or highlighted for additions, nothing in the bill "stuck out" when someone initially looked at it. Instead, he said, "it looked like a completely new bill, and we had to walk the Michigan Bankers Association through it page by page. We spent a lot of time explaining the bill to them so they would understand it." LaPine said after the League's first go around with the bankers over the proposed bill, the MBA had 86 objections out of a 140-page bill. "Eventually we whittled their objections down to about 12 items," he explained. When crafting the credit union bill, LaPine said the Michigan League "was very careful to make sure nothing was included in the bill that could be challenged by the bankers in court," adding that "it would be pretty difficult for the bankers to come back and say that a bill that was passed unanimously by both chambers of the state legislature, is illegal. The question, of course, is whether the bankers want to put the time and resources into challenging the measure." In determining which service provisions to include in the measure, LaPine said the overriding objective was "service to our members." He admitted that there were some provisions, such as service to non-members, that the League was initially hesitant to ask for, "but then that became a concept that had a lot of support," so the League left that in the bill. LaPine said Senate Bill 496 was "specifically worded to allow for a broad interpretation of the provisions by the commissioner, and it was designed in such a way that it would be flexible and could be bent and twisted if we needed to add something new. We want to make sure Michigan state-chartered credit unions aren't at a competitive disadvantage." Reflecting on the passage of Michigan's Credit Union Modernization Act – and the many other updated and modernized credit union acts that have been passed by other states' legislatures and enacted into law – LaPine offered that "that puts pressure on the federal government to update provisions to H.R. 1151. The dual chartering system allows for a leap frog effect between federal and state-chartered credit unions. There's a continual domino effect. That's the beauty and value of the dual chartering system." -

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