Credit Union Choices Expand for Michigan Residents

(LANSING) - A recent bulletin by the Office of Financial and Insurance Services (OFIS) will increase the number of credit union choices available to Michigan residents.

"This bulletin makes it clear that Michigan residents may join more than one community credit union and credit unions may apply for permission to serve residents who are members or eligible to be members of another community credit union," said Office of Financial and Insurance Services Commissioner Frank M. Fitzgerald said. "The standard was not intended to be one community credit union per geographic area."

The Office of Financial and Insurance Services Credit Union Bulletin 00-1 clarifies OFIS' position on fields of membership for community credit unions. The bulletin states that community-based fields of membership may overlap, multiple community credit unions may have the same field of membership, and a defined community may contain smaller defined communities. This clarification eliminates the mistaken belief that persons in one community credit union's field of membership were forever precluded from being served by any other community credit union.

Credit Union Bulletin 00-01 is consistent with a 1984 decision of the Michigan Court of Appeals. In Casazza v. Department of Commerce (134 Mich App 249 (1984)), the court said in part that "we do not interpret the current credit union statute as being designed to curtail possible competition by credit unions…" and "we view the intent of the Michigan credit union statute to be to encourage growth of credit unions and increases in membership." [Casazza, supra, 257.].

While clarifying the issue of community credit union fields of membership, the bulletin also reminded credit unions that Michigan needs a safe, sound, and competitive market in order to provide consumers with a variety of financial services options. It reaffirmed that OFIS' overriding concern will be the effect of any proposed charter change or expansion on a credit union's financial safety and soundness.

"If credit unions choose to qualify for the opportunities made clear in this new bulletin, Michigan residents will reap the benefits of increased competition and have more credit union choices," commented Fitzgerald. "However, only sound, well-managed credit unions with support from current members can expect to get permission to serve a significantly expanded membership base."