With the January 6 start of the 2020 session of the Indiana General Assembly just around the corner, the League continues to prepare to advocate for Indiana’s credit unions on a wide range of issues. Even though legislators are limited as to the number of bills each may file, we anticipate reviewing more than 800 bills for potential impacts on credit unions. In a typical year, the League will end up tracking around 100 bills and will actively engage in discussions on at least a dozen. This year will be no different and with the compact schedule of a short session, the action will begin immediately with many committee hearings likely to be scheduled during the first week on bills that have just barely been released to the public.
In addition to the Uniform Consumer Credit Code issues that we discussed in last week’s Advocacy in Action, the League expects to be engaged in discussions on several other topics. Some include:
State-chartered credit union public funds cap
.
State-chartered credit unions are allowed to accept Indiana public funds deposits, but the State Credit Union Act limits these deposits to 20 percent of a credit union's assets minus the amount of public funds on deposit. Banks and thrifts do not face this type of hard cap on public funds deposits. Instead the appropriate level of public funds deposits is determined institution by institution by the Department of Financial Institutions (DFI) or by the institution’s federal regulator based on appropriate concentration risk for safety and sound considerations. The hard 20 percent cap is inflexible and creates problems for credit unions involved in public funds trying to manage against the cap in market that often involves large swings in deposit volume. The League plans to introduce legislation to remove the 20 percent cap from the statute and provide state-chartered credit unions involved in public funds more flexibility to manage those deposits within appropriate concentration risk parameters.
Real estate appraisal parity
. The Indiana Credit Union Act requires state-chartered credit unions to obtain a written appraisal on any real estate loan that is $250,000 or more. Earlier this year, the federal banking agencies increased this threshold for banks and thrifts to $400,000 for residential real estate loans and recently the NCUA proposed a rule to increase the threshold for federal credit unions to $400,000. The League intends to pursue a change in the State Act to increase the threshold for state-chartered credit unions to match the $400,000 threshold for banks, thrifts, and federal credit unions.
Towing notice
. In recent years, the League has learned from credit unions about significant problems involving the failure to receive notice from tow yards when a vehicle on which a credit union has a lien is towed. Often, the tow yard racks up hundreds of dollars in storage and towing fees before a credit union knows the vehicle has been towed. A few years ago, the League worked with others to require a notice be sent to lienholders of record when a tow yard (or other mechanic's lienholder) intends to sell a vehicle to enforce its mechanic's lien. It was the understanding of all involved that a notice also was required to be sent to lienholders within 3 days of the vehicle being towed in the first place. Unfortunately, it appears that it remains common for a tow yard to notify only the owner of the vehicle (and not a lienholder) of the initial tow. The League intends to pursue another change in the statute to make clear that the initial tow notice is also required to be sent to lienholders of record.
Fraud definition
. During the summer, the League was involved in discussions concerning potentially substantial revisions to Indiana’s criminal statutes related to fraud and deception. Current law lists dozens of different types of fraud and deception that mostly include similar criminal penalties. Legislators are considering simplifying the statutes by removing nearly all of the individual types of fraud and deception and replacing them with one broadly defined crime simply called fraud. The League was involved in these discussions because several of the current individual fraud and deception crimes are related to financial institutions (check deception, credit card fraud, possession of card skimming devices, etc.). If the discussions result in legislation being filed, we will continue to work to ensure that no existing fraud or deception crimes are lost in the new definition and that fraud against a financial institution will be dealt with appropriately.
Elder abuse
. In recent years, there have been many hearings about the rise of elder abuse, particularly financial abuse, in Indiana and elsewhere. The League often hears from credit unions about instances of suspected financial abuse of credit union members and legislators hear often from constituents, social workers, and law enforcement on this issue. So far, it has been difficult to craft legislation to help deal with a wide range of elder abuse issues, but we anticipate that there could be legislation filed in 2020. If so, the League will be actively engaged in the conversations to help ensure that credit unions have the tools they need help protect their members but are not unduly burdened with cumbersome or problematic reporting requirement
s.
If you have any questions about any of these topics or would like to provide the League with any information about your experiences with these issues, please contact Chris Beaumont (
chrisb@icul.org
) or Madison West (
madisonw@icul.org
).
