MARLBOROUGH, Mass. (6/19/15)--The Cooperative Credit Union Association provided extensive oral testimony Wednesday supporting proposed regulations 209 CMR 58:00 for interstate credit union branching in a hearing of the Massachusetts Division of Banks and Loan Agencies on the proposals (Daily CU Scan June 18).

Association President/CEO Paul Gentile has made it a priority to advocate for regional interstate branching and reasonable rules that do not unduly add to the regulatory burden of any credit union. Chapter 466 of the Acts of 2014 mandates that credit union interstate branching regulations be promulgated by July 1. Commissioner David Cotney noted at the hearing that a gubernatorial Executive Order 562 mandates a thorough review of new regulations to reduce unnecessary regulatory burden.

The proposed regulations aim to set forth application and notice authority requirements for Massachusetts-chartered credit unions that want to establish a branch office up to 100 miles from the main office in another state. The regulations would affect credit unions trying to establish branch offices in Connecticut, Maine, New Hampshire, New York, Rhode Island or Vermont. Those credit unions would be subject to conditions to be established by the Massachusetts Commissioner of Banks.

The proposed rules also would establish application requirements for out-of-state state-chartered credit unions and notice requirements for federal credit unions that have a principal place of business in the other states, but plan to establish a branch office in Massachusetts. They too would be subject to conditions set by the Massachusetts commissioner.

In its testimony in support of the proposed regulations, the association noted compliance with the required statutory provisions. The association also commented on multiple provisions, including:

• Eligibility requirements as consistent with current standards applicable to credit union regulations capitalization levels and Community Reinvestment Act (CRA) thresholds (Section 58.03);
   
• Notice requirements for in-state branching as consistent with Regulatory Bulletin 2.1-104, which implements notice requirements for Massachusetts state charters branching within the 100-mile limit (Section 58.04); and
   
• Application requirements that draw a distinction between a Massachusetts state charter and a foreign state-chartered credit union. Each credit union is required to submit an application for approval to its own prudential regulator (Section 58.05).

Interstate branching requirements for federal credit unions were also discussed. The National Credit Union Administration has said in an opinion letter that the requirement is not preempted in Massachusetts. The requirement applies only to federal credit unions branching into Massachusetts from another state specified in the law. Federal credit unions domiciled in Massachusetts can branch across the United States, subject to NCUA’s Chartering and Field of Membership Manual.

Banks, who oppose the measure, also testified at the hearing. Cotney said the regulations will be available on the division’s website July 1. Comments on the proposed regulations are due by 5 p.m. today to the Division of Banks and Loan Agencies.

The league noted special appreciation to Service CU, Portsmouth, N.H., and Triangle CU, Nashua, N.H., for their comment letters to the division advocating support of the proposed regulations and clarity of its provisions. The new law would be effective Oct. 1 and contains a limit of one such expansion per 12-month period.