Yesterday, Governor Tim Walz signed into law a bill to bring parity to state-chartered financial institutions and allow them to offer checking accounts to people that have had accounts forcibly closed within the preceding 12 months, just like federal charters are able to now. The bill passed the House unanimously on May 14. MnCUN thanks the bill's authors, Representative Jim Davnie and Senator Karin Housley, for their support of credit unions.
Work Remains on the 2-Year State Budget
Last week, the Minnesota Legislative leaders came to an initial agreement on the two-year budget, but not before the constitutional deadline for adjournment.
Legislative leaders have laid out a timeline laid that committees will have budgets set by May 28 and bills completed by June 4. To try to avoid any collapse of this deal, any policy changes included in the bills must be signed off on by the Speaker of the House, the Senate Majority Leader and the Governor.
The plan is to convene for the special session on June 14 and be done within a day or so. If legislative leaders are unable to draft legislative language around the top-level budget targets they’ve agreed to by that date, Minnesota state government will go into a partial shutdown, which hasn’t happened since 2011.
The Minnesota state legislature adjourned its regular session on Monday. As this was the first year of the biennium, the main task in front of the legislators when they convened in January was to determine a two-year budget.
In order to sustain and increase the political prominence and influence of Minnesota credit unions, it is imperative to have a strong and sustainable fundraising program for our state and federal political action committees. To achieve this objective, MnCUN’s Political Involvement Committee (PIC) has endorsed the Fair Share plan, which challenges each credit union in the state to financially support political fundraising initiatives. Earlier this year, the Network’s Political Involvement Committee (PIC) voted to keep the Fair Share goal for our member credit unions at $30 a person.
“The Fair Share program was developed to encourage every credit union employee to help protect their industry in the halls of government and has resulted in contributions from hundreds of people across the state,” MnCUN Chief Advocacy and Engagement Officer Mara Humphrey said. “The small dollars raised from so many people demonstrate the depth and breadth of support from credit union staff and we want to thank each and every one that contributed to helping to further the mission of Minnesota’s credit unions.”
The following credit unions have met, or are projected to meet, their Fair Share as of May 1:
Contact Ryan Smith, MnCUN Director of Governmental Affairs by email with questions.
CUNA’s political action committee, CULAC, temporarily paused contributions to candidates in January, allowing for time to reflect, listen to donors and stakeholders, and review contribution policies.
“This historic, bipartisan legislation will address a public safety issue facing consumers, businesses, and financial institutions around the country,” said CUNA President/CEO Jim Nussle.
“MnCUN supports having protections in place for credit unions that might want to serve businesses in the current medicinal market in Minnesota or future markets that may emerge,” said MnCUN President & CEO Mark D. Cummins. “We’d like to thank the House for passing the bill and will continue to encourage our Senators to support its passage in that body.”
The bill passed the House on a strong bipartisan vote of 321-101, with 7 of Minnesota’s 8 members of the House voting in support. The Senate version of the bill was introduced last month and both Minnesota Senators Klobuchar and Smith are listed as co-sponsors.
Yesterday, the Minnesota Senate unanimously passed S.F. 1284, MnCUN-sponsored legislation that makes changes to checking account opening procedures.
Currently, the statute forbids state-chartered financial institutions from opening accounts for people that:
“… [have] had a transaction account closed by a financial intermediary without consent because of issuance by the applicant of dishonored checks within 12 months immediately preceding the application, or…the applicant has been convicted of a criminal offense because of the use of a check or other similar item within 24 months immediately preceding the application.”
Over the years, MnCUN staff have heard from our members that the statue -- while definitely protecting financial institutions -- doesn’t allow for individual state-chartered institutions to consider people’s circumstances and open a new account for them while federally-chartered institutions have no such restrictions. The bill addresses this by adding language that states, “This paragraph does not apply to programs designed to expand access to financial services to individuals who do not possess a transaction account.” Additionally, the bill lifts the cap from $4 to $10 for a dishonored check on any person other than the issuer of the check.
“S.F. 1284 provides parity for our state-chartered members and gives them the ability to open accounts for possible members that are living without transaction accounts, potentially forcing them to use check cashing servicers and other non-traditional financial services companies,” said MnCUN Chief Advocacy and Engagement Officer Mara Humphrey. “We’d like to thank Senators Karin Housley and Melissa Franzen for sponsoring the legislation in the Senate and for their continued support of credit unions.”
The House version of the bill, H.F. 1067 unanimously passed the House Commerce committee in March and awaits floor action in the House.
Earlier this month, Minnesota Congressman Tom Emmer (R), along with Congressman Ed Perlmutter (D-Colo.) introduced the Credit Union Governance Modernization Act. The legislation would modernize the Federal Credit Union Act to allow a credit union board to expel a member for just cause. The bill updates the credit union member expulsion process while ensuring a fair procedure for reinstatement and was modeled on Network-sponsored legislation that was passed in Minnesota for state-chartered credit unions.
In a press release, Congressman Emmer said, “My home state of Minnesota has already taken steps to adopt a similar, important measure. It’s critical we make credit unions safer for both employees and their members. Our community financial institutions are already facing difficulties navigating burdensome regulations as they support their local neighborhoods and businesses, and we need to take steps to make their vital work easier. This nonpartisan legislation will ensure our main street credit unions have the tools to succeed.”
"This bill is important to protect the safety and security of credit union employees and is a much-needed update to the federal credit union charter," said Mark Cummins, President and CEO of the Minnesota Credit Union Network. "We appreciate Representative Emmer’s commitment to Minnesota credit unions and thank him for his continued strong support of our industry."
Companion legislation in the US Senate has not been introduced yet but is expected to be in the near future by Minnesota Senator Tina Smith (D).
Last Friday was the second committee deadline at the Minnesota legislature, where committees must act favorably on bills, or companions of bills, that met the first deadline in the other legislative body.
The Pulse is MnCUN's newsletter that keeps credit union professionals and board members updated on current news and information.
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