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News Now

CU System
Anti-blight Bills Clear Michigan Legislature
LANSING, Mich. (12/12/13)--Michigan credit unions and other financial institutions are exempt from bipartisan anti-blight legislation that won final approval last week from the state Senate last week.
 
The legislation was supported by the Michigan Credit Union League (MCUL).
 
"We worked to secure an exemption in committee, and once we obtained the exemption we supported the package," Ken Ross, executive vice president and chief operating officer of the league, told News Now Wednesday.
 
The legislation, which is expected to be signed by Gov. Rick Snyder, would take effect in March.
 
Credit unions and other lenders sometimes obtain blighted properties, often during the foreclosure process. Financial industry regulators strongly encourage institutions not to hold property on their books. Because of this, lenders such as credit unions are usually able to move quickly to rehab blighted property, which helps ensure those member deposits are returned back to the credit union and can be placed out into other loans.
 
If the exemption were not inserted into the package, credit unions and other lenders could have been responsible for blight violations caused by previous home owners, Ross told News Now. Additionally, if those violations were debated and potentially went unpaid, liens could have been placed against the property as a result.
 
The bills are designed to help cities clean up neighborhoods overrun with dilapidated houses, neglected lawns and abandoned cars by providing citizens and cities with stronger mechanisms for holding property owners accountable.
 
Civil and criminal penalties would be increased for owners who violate blight laws. Communities would have the power to create anti-blight bureaus to pursue criminal charges against property owners with more than $1,000 in unpaid fines. The legislation also would allow cities to deny owners permits to rezone areas or deny building permits to owners who were delinquent on blight fines.
 
If enacted by the governor, blight violators who are charged criminally could now be subject to fines of up to $1,000 and/or up to 93 days in jail.
 
MCUL also encouraged lawmakers to push for additional reforms on the related issue of scrap metal. Hundreds of foreclosed homes continue to be stripped of metal during the lengthy foreclosure process. Vandals sell raw pipes, fencing, and other goods for cash to local scrap metal dealers. HB 4593-4595, a bipartisan package of bills, was introduced in the Michigan House in April to combat the theft of scrap metal from foreclosed properties.
 
Those bills are currently in committee, Ross said.


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