BILL ANALYSIS Ó
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.
AB 2274
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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