SALT LAKE CITY (3/18/08)--Utah Gov. Jon Huntsman Jr. has signed a bill that would result in fewer restrictions against Utah's state-chartered credit unions in the areas of business loans and loan caps. He signed Senate Bill 296, sponsored by Sen. Curtis S. Bramble (R-Provo), last week, according to the State Legislature website. "For nearly a decade Utah bankers have been telling our legislature that the world is flat," Scott Simpson, president/CEO of the Utah League of Credit Unions, told News Now
. "The passing of this bill, though not perfect, is a sign that our legislative leaders are beginning to see through the hyperbole and hollow arguments. "Our House speaker and Senate majority leader have shown great leadership in the face of intense pressure on this issue." Simpson added. The new law:
* Increases the amount a credit union can loan to its members to 4% of assets from the current cap of 1%; * Eliminates a requirement that borrowers must be members at least six months before they can get a business loan and makes members eligible for a business loan immediately upon joining a credit union; and * Maintains the current $250,000 cap on business loans but allows the cap to increase with inflation, beginning May 5 with an increase each year on Jan. 1. The inflation figures are tied to the Consumer Price Index.
The bill was part of a compromise solution negotiated between the Utah League of Credit Unions and the Utah Bankers Association in which both groups promised not to seek changes in the law for at least five years (News Now