CA bill updating, modernizing charter moves forward

Aug. 16, 2016 -- Legislation updating and modernizing the state credit union charter -- giving California credit unions more flexibility – has moved another step forward in the state assembly.

The legislation -- AB 2274 (supported by the California Credit Union League, CCUL) – was passed unanimously by the state senate Monday evening, 38-0. Among other things, the legislation would:

  • Allow member business loans to exceed a member's deposits;
  • Eliminate board approval of membership applications;
  • Authorize an audit committee in lieu of a supervisory committee;
  • Permit non-members to act as the co-borrower, surety, or guarantor of a loan made to a member;
  • Redefine which credit union officials' loans are subject to certain limitations and are required to be reviewed by the board;
  •  Empower credit unions to decide whether their boards need to meet on a monthly basis, or if they should opt to meet less often based on the needs of the credit union;
  • Remove unnecessary loan documentation requirements.

According to the CCUL, the bill will next be heard on the California State Assembly Floor before heading to the Governor for a signature.