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.
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