In the matter
of Third Party Membership Services
Issued and entered
this 10th day of June 2005
By Linda A. Watters, Commissioner
This bulletin
supercedes Bulletin 84-2.
The purpose of
this bulletin is to clarify third-party services permitted in Sections 401(2)(rr)
and 409(5)-(6) of the Michigan Credit Union Act, 2003 PA 215, as amended, MCL
490.401(2)(rr) and 490.409(5)(6), and to clarify minimum requirements for safety
and soundness in this area.
Programs and services
must be of a financial nature. Details of programs not specifically permitted
in the Act should be forwarded to the commissioner for review prior to implementation.
Also prior to implementation, the Board of Directors must: provide for the following:
| 1. |
Investigate
the service or endorsement and the vendor to determine that the service
or endorsement serves the interest of the credit union members, particularly
in terms relating to costs and benefits to the members as opposed to the
credit union itself. |
| 2. |
Approve the
program or service and record the reasons therefore in the minutes. |
| 3. |
Enter into
a written agreement with the vendor that includes, but is not limited to,
duties to be performed by the credit union and the reimbursement schedule,
if any. The agreement should include a discussion of potential liability
and clearly indicate that the credit union will not be responsible for vendor
errors. |
A credit union
may only serve as an informational conduit and provide administrative support
for a vendor, and may not actually perform a service that is not otherwise permitted
by the Michigan Credit Union Act.
Any questions
regarding this bulletin should be directed to:
Office of Financial
and Insurance Services
Credit Union Division
611 West Ottawa Street
P.O. Box 30220
Lansing, Michigan 48909-7720
Phone: (517) 373-6930
Toll Free: (877) 999-6442
Signed: Linda
A. Watters
Commissioner of Financial and Insurance Services
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