BILL ANALYSIS                                                                                                                                                                                                    



                                                                    AB 2274


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          Date of Hearing:   April 13, 2016


                        ASSEMBLY COMMITTEE ON APPROPRIATIONS


                               Lorena Gonzalez, Chair


          AB  
          2274 (Dababneh) - As Introduced February 18, 2016


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          Urgency:  No  State Mandated Local Program:  NoReimbursable:  No


          SUMMARY:


          This bill makes assorted changes to the California Credit Union  
          Law. In summary, the bill: 


          1)Adds a requirement that a credit union board meet on a regular  
            basis, not less than quarterly, and removes the requirement  
            for the directors to review a report of membership  
            applications. 








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          2)Requires the memberships of the supervisory committee to be an  
            odd number and would authorize the establishment of an audit  
            committee in lieu of a supervisory committee. 


          3)Deletes a provision requiring any application for a loan or  
            extension of guarantee of credit to state in writing its  
            purpose.  


          4)Permits a nonmember to participate in an obligation or  
            extension of credit to a member as a co-borrower, surety, or  
            guarantor. 


          5)Modifies the definition of "official" to include a member of  
            the audit committee, credit manager, president, or chief  
            executive officer of a credit union. 


          6)Permits a business member's loans to exceed that member's  
            deposits. 


          FISCAL EFFECT:


          Negligible state costs. 


          COMMENTS:


          1)Purpose and background. This bill is intended to update and  
            strengthen the California state charter credit union statute.  
            It aims to give credit unions new options in the way they are  
            organized and allows them to better serve their members. 








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            California credit unions can be chartered either by the  
            National Credit Union Administration (NCUA) or their state  
            supervisory agency, the Department of Business Oversight  
            (DBO).  As of the first quarter of 2015, there were 143  
            state-chartered credit unions in California and 210 federally  
            chartered credit unions. Supporters of the bill argue that  
            California's state charter has not been modernized in over a  
            decade and must be updated to remain competitive with the  
            federal charter. 


          Analysis Prepared by:Luke Reidenbach / APPR. / (916)  
          319-2081