MARLBOROUGH, Mass. (1/8/15)--The Massachusetts Legislature Tuesday passed a regional interstate banking and branching measure that permits state credit union branching into the New England area.
The passage of the measure was one of the top legislative priorities of the Cooperative Credit Union Association (Daily CU Scan Jan. 8).
Interstate branching requires an application to and advance regulatory approval by the Massachusetts commissioner of banks and retains state consumer protections and Community Reinvestment Act requirements.
The new law is a major step forward in modernizing the nation's oldest credit union law and keeping the Massachusetts credit union charter competitive, the association said. State branching authority was enacted in 1965, a mileage limit was inserted in 1977, and the last mile amendment was adopted in 2004 to expand to the current mileage limit of 50 miles.
Key provisions of the bill include:
Massachusetts Gov. Deval Patrick has until today to sign the measure into law.
"This has been one of our top legislative priorities as we continue to work to improve the operating environment for credit unions," said association President Paul Gentile. "The bill provides much-needed flexibility for branching in New England."
To expedite the administrative process, the association has worked to secure a commitment by the Massachusetts commissioner of banks to begin the required rulemaking process immediately. Once the regulations are finalized, the commissioner will consider, receive and approve applications. Branches, however, may only be built as of the Oct. 1 effective date, in compliance with the new law.
The Legislature also enacted another legislative priority of the association, House 3954, An Act Relative to the List of Legal Investments prepared by the commissioner of banks.
The new law, effective today, marked the first substantive update to statutory investment provisions for credit unions in decades. The bill streamlines the petition process for the commissioner of banks to add permissible investments available to state-chartered credit unions.
The measure also updates criteria to add permissible investments, organizes the criteria into one location within Chapter 171 and adds certain "prudent person" investment authority.