SALT LAKE CITY (2/4/08--Utah credit unions are seeking three legislative changes to Utah’s state charter for credit unions that would ease restrictions and bring it more in line with the federal charter. Credit unions are seeking the following three changes to the state charter:
* Increase the amount a credit union can loan to its members to 10% of assets from the current 1%; * Eliminate a requirement that borrowers must be members of a credit union for six months before receiving a business loan; and * Raise the business lending limit to 12.25% of a credit union’s assets from its current lending limit of $250,000 per member.
If the state legislature does not make the changes sought by the Utah credit union industry, the credit unions may consider taking the matter to the public through a statewide “financial freedom” ballot initiative. This ballot initiative would ease state legislature-imposed lending restrictions on state-chartered credit unions. The initiative also would contain several consumer-friendly provisions (News Now
Jan. 15). Talks among the state’s credit unions, banks and state legislature will continue, State Sen. Majority Leader Curt Bramble (R-Provo) said (Salt Lake Tribune
Jan. 30). “I remain hopeful that there will be a legislative solution to this situation,” Scott Simpson, president of the Utah League of Credit Unions, told News Now
. As for the financial freedom ballot, “it remains on the table, but it is premature to talk about it any more at this time,” Simpson said. Also, Utah credit unions want to retain favorable provisions of the state charter that allow them to cross county lines when defining their field of membership.