BILL ANALYSIS                                                                                                                                                                                                    �



                                                                  AB 1282
                                                                  Page  1

          Date of Hearing:   May 1, 2013

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                  Mike Gatto, Chair

                    AB 1282 (Bonta) - As Amended:  April 15, 2013 

          Policy Committee:                              Banking and  
          Finance      Vote:                            11-0

          Urgency:     No                   State Mandated Local Program:  
          No     Reimbursable:              

           SUMMARY  

          This bill changes the assessment that a state-chartered credit  
          union pays to the Department of Financial Institutions (DFI).   
          The bill requires a state-chartered credit union's annual  
          assessment to be the greater of $2,000 or the sum from  
          multiplying the assessment rate by the eligible amount of  
          assets.  The portion of assets subject to the levy is calculated  
          by multiplying a portion of the credit union's total assets, the  
          portion varying by the size of the credit union, by a percentage  
          specified in statute, a percentage that declines with the size  
          of the institution.
              
           FISCAL EFFECT  

          Negligible fiscal impact.  No significant change in revenue for  
          DFI is anticipated.

           COMMENTS  

           1)Purpose  .  According to the author the goal of AB 1282 is to  
            equitably redistribute assessments paid by state-chartered  
            credit unions to DFI to keep them more closely aligned with  
            their federally chartered counterparts.  The author asserts  
            the new formula will be more attractive to the largest  
            state-chartered credit unions while allowing DFI to continue  
            to be adequately funded.  The author argues should these three  
            largest credit unions leave for what is a considerably cheaper  
            federal charter, it would be a loss of almost $2 million of  
            the $7 million total in assessment revenues.

           2)Background  .  California has 251 federally-chartered credit  








                                                                  AB 1282
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            unions and 152 state-chartered credit unions.  State-chartered  
            credit unions are regulated by DFI. The Commissioner of DFI  
            collects fees from state-chartered credit unions in an amount  
            sufficient to meet the expenses for regulating credit unions.   
            Currently, the minimum annual assessment is $1,500.  Because  
            of lower fees, federal charters have become more attractive.    
            As an example, the largest state-chartered credit union, the  
            Golden 1 Credit Union, currently pays $700,000 in DFI  
            assessments.  If they held a federal charter, they would pay  
            $475,000 in federal assessments.  
                
            3)There is no registered opposition to this bill. 
                
                  

           Analysis Prepared by  :    Roger Dunstan / APPR. / (916) 319-2081