SB 657 — AN ACT CONCERNING THE FIELDS OF MEMBERSHIP OF CONNECTICUT CREDIT UNIONS.

General Assembly ProposedCommittee Bill No.

23995118 Referred to Committee on BANKING Introduced by:

SEN.(BA) AN ACT CONCERNING THE FIELDS OF MEMBERSHIP OF CONNECTICUT CREDIT UNIONS.

BERTHEL, 32nd Dist.

AN ACT CONCERNING THE UPDATING OF THE FIELD OF MEMBERSHIP OF EACH CONNECTICUT CREDIT UNION.

ThatSection section1. 36a-438a of the general statutes be amended to provide that each Connecticut credit union shall regularly update and maintain such credit union's field of membership.

StatementSection 36a-438a of Purpose:the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2023):

To(a) provide(1) thatExcept eachas Connecticutprovided creditin unionsubdivision shall(2) regularlyof updatethis andsubsection, maintainthe suchfield of membership of a Connecticut credit union'sunion fieldis oflimited membership.to:

(A) [a] A single common bond membership;

[,] (B) a multiple common bond membership;

[, or] and (C) persons within a well-defined community, neighborhood or rural district.

(2) The field of membership of a Connecticut credit union may include:

(A) [members] Members of the immediate family or household of all persons included under subparagraphs (A), (B) and (C) of subdivision (1) of this subsection;

[,] (B) organizers and employees of such credit union;

[,] (C) the surviving spouse of a deceased member of such credit union;

[, and] (D) notwithstanding any change in employment, occupation, residence or other condition initially controlling the eligibility for membership in any Connecticut credit LCO No.

5118 1 of 5 Committee Bill No.657 union, any person properly admitted to membership in a Connecticut credit union, [.

Such] and such person may continue membership therein during such person's lifetime;

(E) partnerships in which the majority of the partners are individuals who are members of such credit union;

(F) corporations in which the majority of shareholders are individuals who are members of such credit union;

(G) organizations of individuals who are members of such credit union;

and (H) associations of individuals, provided such associations were formed to serve a purpose other than expanding the field of membership of such credit union.

The commissioner shall, in determining whether an association was formed to serve a purpose other than expanding the field of membership of a Connecticut credit union, consider the totality of the circumstances, including, but not limited to:

(i) The public interest and benefit of the proposed expansion;

(ii) whether the association provides opportunities for members to participate in furthering the goals of the association;

(iii) whether the association maintains a membership list;

(iv) whether the association sponsors activities;

(v) whether the association's membership eligibility requirements are limited to the association's stated purpose;

(vi) whether the members of the association pay dues;

(vii) whether the members of the association have votingrights intheassociation;(viii)theextent ofmeetingsandmember engagement on topics related to the association's core purposes;

and (ix) the degree of separation between the association and the credit union.

[(3) The field of membership of a Connecticut credit union under subparagraphs (A) and (B) of subdivision (1) of this subsection may include associations and organizations of individuals who are members of such credit union, partnerships in which the majority of the partners are individualswho are membersofsuch credit union,andcorporations in which the majority of whose shareholders are individuals who are members of such credit union.] [(4)] (3) The field of membership of a Connecticut credit union under subparagraph (C) of subdivision (1) of this subsection may include groups located outside of the well-defined community, neighborhood LCO No.

5118 2 of 5 Committee Bill No.657 or rural district such credit union serves that were within such credit union's field of membership at the time it converted from a field of membershipspecifiedinsubparagraph(A)or(B)ofsaidsubdivision (1), provided such credit union's continuing relationships with such groups are not exclusive and, if authorized under this chapter, other Connecticutcreditunionsmayalsoprovideservicestosuchgroups.The commissioner may not approve an amendment to the bylaws of such a creditunionunderthissubdivisionunlessthecommissionerdetermines in writing that any potential harm that the expansion of the field of membership of such credit union may have on any other Connecticut credit unionanditsmembersisclearly outweighedinthepublicinterest by the probable beneficial effect of the expansion in meeting the convenience and needs of the members of the group proposed to be included in the field of membership.

(b) [Notwithstanding the provisions of subsection (a) of this section, the] The commissioner may authorize a Connecticut credit union with a multiple common bond membership to include in its field of membership any person within a well-defined community, neighborhood or rural district if:

(1) The commissioner determines that the well-defined community, neighborhoodorruraldistrictis:(A)[an]Aninvestmentarea,asdefined in Section 103(16) of the Community Development Banking and Financial Institutions Act of 1994, 12 USC Section 4702(16), and meets anyadditionalrequirementsthatthecommissionermayimpose;and(B) underserved by other depository institutions, as defined in Section 19(b)(1)(A) of the Federal Reserve Act, 12 USC Section 461(b), based on data of the commissioner and federal supervisory agencies;

and (2) The Connecticut credit union establishes and maintains a main office or branch in the well-defined community, neighborhood or rural district at which credit union services are available.

(c) Any Connecticut credit union that is so authorized to expand its field of membership under subsection (b) of this section continues as a LCO No.

5118 3 of 5 Committee Bill No.657 Connecticut credit union whose field of membership is limited to a multiple common bond membership.

(d) (1) The commissioner may not approve an amendment to the bylaws of a Connecticut credit union with a multiple common bond membership to expand its field of membership to add a group of five hundred or more potential members, excluding individuals who are potentially eligible as members of the immediate family or household of a potential member, or persons within a well-defined community, neighborhood or rural district, unless the commissioner determines in writing that:

(A) [the] The Connecticut credit union has not engaged in any material unsafe or unsound practice during the one-year period preceding the date on which the proposed amendment is filed with the commissioner;