SACRAMENTO, Calif. — State chartered credit unions in California will operate under an updated set of rules next year, thanks to a Credit Union Modernization Bill that sailed through the legislature with no opposition.
AB 1518′s most notable change allows nonmembers to act as co-borrowers on member loans.
"Credit unions know that they open accounts for co-signers, who don't plan on using the credit union for anything else. So credit unions have thousands of accounts with $5 balances, and let's face it: we all know what a pain that is," said Ron Fong, state director of government affairs for the California Credit Union League.
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"So, in cooperation with the DFI, we fixed that. Of course, co-borrowers who don't open memberships can't take advantage of any credit union benefits, either," he said.
The bill also increased the amount credit unions may donate to charity without board approval, from $1,000 to $25,000.
AB 1518 was authored by the Assembly Banking Committee and its chairman, Assemblyman Ted Lieu (D-Torrance), and goes into effect January 1, 2008. The credit union code was last updated about 10 years ago, Fong said.
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