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Credit Union FAQ
Credit Union FAQ's for Consumers
Credit Union FAQ's for Industry
Both banks and credit unions are depository institutions and offer consumers many of the same services.
A credit union is a "not for profit" corporation organization owned by its member depositors and is established solely for the benefit of its members. A Michigan state-chartered credit union operates under the authority of and receives its powers from the Michigan Credit Union Act. There are also Federally-chartered credit unions that operate under the authority of the Federal Credit Union Act and are regulated by the National Credit Union Administration (NCUA). Most credit unions are Federally insured, and Federal insurance is required for any credit union doing business in the State of Michigan.
A bank is a "for profit" corporation owned by its stockholders and is established to provide financial services to the general public. Bank deposits are insured by the Federal Deposit Insurance Corporation (FDIC). State-chartered banks operate under the authority of and receive powers from the Michigan Banking Code.
A credit union can be chartered, or licensed, with state regulatory agencies or with the Federal government. This determines what regulations a credit union will operate under and who its primary regulator will be. The difference between a Federal and state charter has very little impact on consumers and most people would probably not notice it. Our credit union locator is a directory of Michigan state-chartered credit unions.
If your credit union is chartered by the State of Michigan, the toll-free number for consumer complaints is 1-877-999-6442. Problems with credit unions chartered in other states should be discussed with that state's financial institutions regulator. The regulator can usually be found on the state's website. You can also find a list of state regulators on the National Association of State Credit Union Supervisors website at NASCUS.
Generally, the rate that may be charged is the rate permitted in the financial institution's home state. This is determined by either that state's statutory code, or by the State Financial Institutions Department that has chartered the bank or credit union. A Michigan State-chartered depository institution may charge whatever interest rate the institution and the customer agree to.
There are two authorities that charter credit unions in Michigan. They are the Office of Financial and Insurance Regulation (OFIR) in Lansing, Michigan, and the National Credit Union Administration in Albany, New York. The OFIR Corporate Review Section has prepared a credit union organization package that can be viewed on our web site at www.michigan.gov/ofir. The organization package can also be mailed to an interested party upon request.
In addition, the two Michigan Credit Union League may be helpful when seeking credit union organization information.
The telephone numbers for each of the organizations are:
OFIR Corporate Review Section
National Credit Union Administration (518) 862-7400
Michigan Credit Union League (800) 262-6285
First, determine what changes are needed. In most cases, one of our standard or optional bylaws will cover the credit union's needs. If your credit union's needs will not be met by a pre-existing bylaw, custom bylaws may sometimes be approved. Please contact our office in regard to determining what custom bylaws might be permitted.
After the proposed changes have been reviewed and approved, OFIR will forward the amendment forms to the credit union. Most credit unions' bylaws address approval of amendments in Article XVII. The credit union must provide the proposed bylaw amendment and notification of voting to either the membership or board of directors as specified in Article XVII. The signed forms must be returned to OFIR, and must have final approval from OFIR prior to the bylaw amendment becoming operative.
No. OFIR will generate the bylaw amendment forms as well as the new bylaw pages in order to ensure that our files accurately reflect the bylaws of the credit union. Section 490.1(g) of the Michigan Credit Union Act directs OFIR to prepare approved forms of bylaws and supply them to credit unions without charge.
Corrected reports should be submitted using the NCUA CU Online process for all online filers. The original 5300 report filer at the credit union can re-open the specific period call report and resubmit the report once all the changes are made. Manual filers should send OFIR a complete copy of the 5300 specifically outlining all amended line items and mail or fax the information to the OFIR Credit Union Division. Hardcopy submission of 5300 amendments will only be accepted for those institutions exempted from online filing (i.e. those identified as manual filers).
Send a letter to our office in advance of the move informing us of your new address. If a modification to your Certificate of Organization is necessary, we will send the appropriate forms for your board's approval.
A credit union's Certificate of Organization must reflect the location of its current home office. Sometimes a credit union will have changed offices at some time in the past and its certificate was not changed. It is also possible that changes in municipal borders could make a change to the Certificate of Organization necessary. In any case, inform our office that a correction needs to be made to the certificate, and we will send the appropriate forms for your board's approval.
Yes. In addition to a written notification, those credit unions with an Article III bylaw using language similar to "Employees or members of employer groups or other organized groups which are located within 25 miles of the credit union's main office or a branch office" to define their field of membership must amend Article III of the credit union bylaws to reflect the new (or closed) location.
There are several steps to the process. First, download or print out form FIS 1057 Application for Permission to Merge a Credit Union with Another Credit Union. You should also read Section 371of the Michigan Credit Union Act regarding mergers.
If your credit union is absorbing or merging into a Federally-chartered credit union, merger applications must be filled out for both OFIR and the NCUA. If two Michigan state-chartered credit unions are merging, then only a single merger package is necessary, but a copy should be sent to the NCUA at the same time.
Merging a state-chartered credit union into a state-chartered credit union from a different state can be very complicated due to possible differences in state laws, and you should call our office to discuss the matter.
The merger application should be filed with our office as soon as possible so that it may be analyzed and a decision reached prior to the proposed merger date. A minimum of 45 days should be allowed. You should be careful to include all the needed items in the merger package, as additional requests from our office will delay the process.
Our office will review and analyze the merger package and the examination reports to reach a decision. If approved, the credit unions have 60 days to merge; however, if the planned merger date is later, a credit union may request an extension of time to complete the merger.
After the merger has taken place, the surviving credit union must supply written notification of the completion of the merger and submit a balance sheet reflecting the combined credit union's financial condition as of the merger date. After our office receives the combined balance sheet, a final Certificate of Merger will be issued. At this time, the surviving credit union should also request modification of Article III of its bylaws to reflect the addition of the merged credit union's field of membership, if necessary.
A request for a name change should be sent to our office. Sometimes a change in field of membership requires a name change if the old name would no longer accurately reflect the new field of membership. It is the responsibility of the credit union's management to ensure their new name is not copyrighted, trademarked or otherwise in use or protected. OFIR will do a preliminary review for any conflicts, and we will alert you to any potential problems we find. However, by granting permission for the use of a name, OFIR is not guaranteeing immunity from future civil action. You should discuss potential name changes with your legal counsel.
As of the effective date, the new title must be used on all signage, forms, documents, letterheads, checks and other material issued by or identifying the credit union. Your depository bank, bonding company and other creditors should also be advised of the name change.
In most cases, the board must pass a resolution changing the number of directors and then send OFIR a copy. OFIR will then send a letter indicating that we have updated your bylaws.
All changes in branch locations or officials should be presented to OFIR by mail or fax on credit union letterhead. Changes in the CEO or general manager of a credit union should include the board resolution appointing the candidate to the position. Any changes reflecting data included in the NCUA CU Profile section of the Credit Union Online application must be immediately submitted through that application as well.
The answers provided are not meant to be a substitute for legal advice.
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