For the first time in more than 60 years, starting this week, credit unions in the nation’s capital may be chartered through the District of Columbia government.
Under legislation enacted by the DC City Council, the city’s Department of Insurance, Securities and Banking may now charter credit unions. Congress stripped the district of that power in 1964.
“This is a win for credit unions giving them an additional option to consider when determining how best to serve their members,” said MD & DC Credit Union Association President/CEO John Bratsakis. “It gives credit unions another arrow in their quiver to deploy.”
Earlier this year the city council’s Business and Economic Development Committee reported there were nearly 80 credit unions operating in the district; they all were chartered by the federal government.
The committee said that the district chartering statute is less restrictive than the Federal Credit Union Act. For instance, the statute is less confining in defining a credit union’s field of membership. “This flexibility recognizes the unique size, characteristics and needs of the district’s population,” the committee said in its report.
The district’s statute also allows for compensation of directors and committee members–something the federal law prohibits. In addition, the DC statute has a broader list of allowable investments.
Bratsakis said the credit union association has been working on the chartering issue since 2001.