Bill Provisions
House Bill 81, the Credit Union Member Service Powers Bill, was signed into law by Governor Bob Taft on Jan. 10. The bill's provisions will take affect on April 14, 90 days after the bill was signed into law.

House Bill 81 is consumer-friendly legislation that will do the following for both state- and federally-chartered credit union:

• Allow credit union members to use their credit unions for guardianship accounts,

• Allow members to keep their funds on deposit at their credit union after the death of a spouse while a will is probated, and

• Exempt credit unions from the Consumer Sales Practices Act and the Retail Installment Sales Act, which were meant to control abusive practices by sellers in Ohio, not financial institutions. This exemption means that credit unions will be treated the same as other financial institutions, and not be subject to additional advertising and other disclosure requirements, private rights of action filed by individuals, or Attorney General sanctions. Credit unions will continue to be subject to relevant consumer laws such as truth in lending and truth in savings.  

 

Additionally, House Bill 81 will do the following for state-chartered credit unions:

• Allow members to have retirement accounts, education accounts, and health savings accounts at their state credit union,

• Allow members to have expanded access to short-term advance loans,

• Allow credit unions to establish a student branch of the credit union to allow students in grades K-12 to be members as long as they remain a student,

• Grant parity to state-chartered credit unions equal to the powers that federally-chartered credit unions have in a more expeditious manner,

• Allow credit unions to hold meetings electronically,

• Require credit union police personnel to go through Ohio Peace Officer training,

• Allow Interest on Lawyers' Trust Accounts (IOLTA) for all state-chartered credit unions,

• Allow credit unions to create a statutory lien on the shares of a member,

• Allow credit unions to maintain records electronically and use the records in other proceedings,

• Permit credit unions to provide reasonable health and accident insurance to their directors,

• Allow the superintendent to establish a liquidity fund greater or less than 5% of shares for a credit union or all credit unions, and

• Allow credit union directors to amend the credit union’s articles as to the name of the credit union and the location of the principle office.

 

The Senate Finance and Financial Institutions Committee passed Sub. House Bill 81 by a unanimous vote on Dec. 13. Sen. Tom Roberts (D-Dayton) made the motion to vote on Sub. HB 81 and Senator Patricia Clancy (R-Cincinnati) seconded. The bill had two hearings in the Senate committee prior to the committee’s vote and recommendation for passage.

Sub. HB 81 was passed by the full Senate by a unanimous vote of 32 to 0 on Dec. 14. During his floor speech to the Senate, companion bill Senate Bill 72 sponsor Sen. Robert Spada (R-N. Royalton) encouraged Senate members to pass the bill. “I am proud of the work that has been accomplished on this bill, and the time and effort put forth by members of the General Assembly, their staffs, the Ohio Credit Union League, and other interested parties,” said Spada. Sen. C.J. Prentiss (D-Cleveland) commended the credit union and banking industries for working together to refine the bill, and encouraged members to pass the bill. After the unanimous vote, several senators added themselves as bill co-sponsors.

Bill sponsor Rep. Geoffrey Smith (R-Upper Arlington) reintroduced Sub. HB 81 to the House for concurrence late Dec. 14. House members passed the amended bill by a vote of 89 to 2. The House had to vote to accept technical amendments made to the bill by the Senate Finance and Financial Institutions Committee. Smith assured members during his floor speech that while minor changes had been made, the bill’s substance remained the same. Reps. Bubp (R-Loveland) and Uecker (R-Loveland) voted against the bill.

 

House Bill 81 was co-sponsored by Reps. Dixie Allen (D-Dayton), Catherine Barrett (D-Cincinnati), Kenneth Carano (D-Youngstown), Larry Flowers (R-Canal Winchester), Randy Law (R-Warren), Jim McGregor (R-Gahanna), Sylvester Patton (D-Youngstown), Jeanine Perry (D-Toledo), Jon Peterson (R-Delaware), Linda Reidelbach (R-Columbus), Dan Stewart (D-Columbus), Fred Strahorn (D-Dayton), Mary Taylor (R-Green), Peter Ujvagi (D-Toledo), Shawn Webster (R-Millville), Larry Wolpert (R-Hilliard), and Claudette Woodard (D-Cleveland Heights).

 

Contact John Kozlowski at (614) 336-2894 or jkozlowski@ohiocul.org with any questions about the bill.