The following is a press release from the Massachusetts Senate President’s office.
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BOSTON – The Massachusetts State Senate passed legislation on Monday, July 20, to streamline regulation of credit unions.
In assigning new duties and offering appropriate flexibility to credit unions, the bill ends uncertainty over when and where credits should be considered as legally distinct from banks – some regulations continue to be common to both, while others only affect one group or the other. In a major change, credit union fees would be required to be consistent with banking fees.
The bill, An Act Modernizing the Credit Union Laws, also makes reforms to adjust the industry to the reality of remote work. For instance, the bill ensures that applications for loans may be done electronically and repeals now out-of-date regulations on advertisements and telephone-based customer service.
The bill further makes headway into the digital age by updating and expanding online standards as well as critical privacy protections which are guaranteed to the customers of credit unions.
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“I am thrilled to see this bill advance today as it an example of the Senate’s efforts to improve access to our financial institutions,” stated Senate President Karen E. Spilka (D-Ashland). “I would like to thank my colleagues for elevating this important issue and ensuring its swift passage.”
Having passed the Senate, the bill now moves to the Massachusetts House of Representatives for consideration.
“Credit Unions provide a vital service in our communities yet the laws that govern them have not significantly changed in thirty years,” said State Senator Michael J. Rodrigues (D-Westport), Chair of the Senate Committee on Ways and Means. “After several years of working towards a fair resolution, this bill will modernize these laws and allow credit unions to adapt to a financial landscape that has shifted dramatically over the last three decades. Thank you to Senate President Spilka for her leadership and Senator Eldridge for his dedicated work on this legislation.”
“I was very proud to file this legislation this session, given how many of my constituents rely upon credit unions, and how credit unions give back to their customers, and the communities that they are located in,” said the bill’s sponsor, Senator Jamie Eldridge (D-Acton). “I want to thank the Joint Committee on Financial Services, co-chaired by Senator Jim Welch for reporting the bill favorably, and to Senate Ways and Means Chairman Mike Rodrigues and his staff for prioritizing the legislation. Chairman Rodrigues is a long-time champion of credit unions. The modernization of credit unions will allow for a more logical and organized system that will better serve the residents of Massachusetts.”
“This bill provides much needed modernization to the Credit Union laws and will help to streamline operations in the financial services industry.” said Senator James T. Welch (D-West Springfield), Chair of the Joint Committee on Financial Services. “I am glad to see legislation passed as a result of several groups and advocates working together to find a balance of all interests.”
Much of the bill focuses on the appropriate balance between giving credit unions greater financial, technological, and regulatory flexibility, while also maintaining oversight and consumer protection. Credit unions are for the first time given the option to hire outside consultants to determine interest rates. While keeping regulations in place that ensure that Massachusetts credit unions are majority local, the bill allows them to take on a larger geographic role with mortgage loans on properties in nearby states. The Commissioner of Banks and the Commissioner of Administration and Finance are both given roles in oversight of credit unions.
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