December 05, 2003
December 5, 2003
LANSING – Governor Jennifer M. Granholm this week signed several new laws that modernize the regulation and chartering of state-chartered credit unions. The laws have several consumer friendly provisions, including a cap on interest rates for short-term loans and enhanced services to consumers in underserved areas.
"I am pleased to sign these new laws so that Michigan’s state-chartered credit unions can remain strong and continue to meet the needs of Michigan’s families," Granholm said.
The new laws represent the first major changes to the Michigan Credit Union Act since 1986. The provisions of the new laws include:
• modernizing and clarifying the powers of the Commissioner of the Office of Financial and Insurance Services (OFIS) to charter state credit unions as not-for-profit financial institutions and supervise those institutions;
• permitting state-chartered credit unions to make short-term loans to members of 30 days duration for an amount not to exceed $1,000 (in place of higher-cost so-called "pay day loans"). For these loans, credit unions may not charge more than 10 percent of the principal amount of the loan in interest and fees;
• providing for an examination of state-chartered credit unions at least once every 18 months to determine if the institution is conducting its business in accordance with state laws;
• allowing the boards of directors for state-chartered credit unions to determine the field of membership of the credit union with certain restrictions and subject to review by the OFIS Commissioner;
• allowing for the merger of state-chartered credit unions with other credit unions or thrift institutions;
• expanding the ability of credit unions to provide certain services to nonmembers in underserved areas. These services include cashing checks, exchanging foreign currencies, and performing wire transfers.
"These new laws accommodate changes in technology and business and allow credit unions to provide new services," Granholm said. "Consumers will have more choices under these new laws when it comes to seeking and securing financial services through credit unions."
