Bulletin No. 2005-11-CU
In the matter of Third Party Membership Services
Issued and entered this 10th day of June 2005
By Linda A. Watters, Commissioner
This bulletin supersedes 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:
- 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.
- Approve the program or service and record the reasons therefore in the minutes.
- 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