Oregon CU Act Update Passes House Unanimously
The bill includes a change to streamline regulatory approval of bylaw amendments, two changes allowing more flexibility on governance issues, and an update to the federal parity provision.
As part of an ongoing effort to improve and modernize the Oregon Credit Union Act, HB 2161 passed the Oregon House of Representatives this afternoon, with 56 Representatives voting in support of the credit union-backed measure.
“We are thankful for the thoughtful examination given to the bill, and the strong support shown for this common sense update,” added Pamela Leavitt, NWCUA Policy Advisor, Oregon State Advocacy & Grassroots.
The bill seeks to streamline regulatory approval of bylaw amendments, allows more flexibility on governance issues, and adds an update to the federal parity provision.
A full brief on the bill is below, which will move to the Senate next, where it is awaiting its first reading. Leavitt added that, while a big win for Oregon credit unions, advocate voices are now needed in the Senate.
“We’ll be in touch soon on how to best connect with Senators to help bring the voice of two million Oregonians who belong to a credit union to Salem, and ensure this bill passes both chambers,” she said.
Approval of Bylaw Changes
Bylaw amendments must be submitted to the Department of Consumer and Business Services (DCBS) for approval. Section 1 streamlines the approval process under ORS 723.022. The existing statute requires DCBS to approve bylaw changes in writing. As revised, the statute eliminates the need for a written approval and allows changes to take effect 30 days after submission unless DCBS either disapproves the amendment or requests additional information from the credit union. It is important to note that this change does not reduce the authority of DCBS to approve or deny bylaw amendments; it simply avoids the need for formal written approval in order for the amendment to take effect.
Expulsion of Member
This change allows a credit union to expel a member engaged in activity that is likely to cause a loss to the credit union, even if that loss has not yet occurred. The wording of the current statute could lead to a conclusion that expulsion is not available until the member has already caused a loss or has otherwise breached an agreement with the credit union. When a credit union is aware of likely account fraud, kiting, or other illegal or risky activity that will cause a loss to the credit union absent preventive measures, there is no reason that the credit union should have to wait to expel the member.
Frequency of Board Meetings
This section removes from ORS 723.292 the specification of a required number of board meetings per year, delegating authority to DCBS to prescribe the minimum number of board meetings by rule. This is the same approach taken for banks under ORS 707.670.
Update to Federal Parity Provision
ORS 723.156 is referred to as the federal parity provision. This statute allows Oregon state chartered credit unions to exercise powers that are available to federal credit unions doing business in Oregon. It serves to maintain the attractiveness of the Oregon charter in comparison with the federal charter. Updating the “strike date” in the parity provision permits Oregon credit unions to exercise federal powers under the new or updated federal credit union regulations in the same manner as federal credit unions.
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