Michigan Senate Bill SB0388

Michigan 2023-2024 Regular Session

• Introduced: 6/14/23
• Refer: 6/14/23
• Report Pass: 10/5/23
• Refer: 10/5/23
• Report Pass: 10/17/23
• Engrossed: 10/18/23
• Refer: 10/18/23
• Refer: 1/18/24
• Report Pass: 2/6/24
• Enrolled: 6/26/24
• Chaptered: 7/30/24
• Passed: 7/30/24

Caption

Financial institutions: credit unions; designation of inactive account; allow under certain conditions. Amends sec. 355 of 2003 PA 215 (MCL 490.355).

Impact

The passage of SB 388 aims to streamline the management of inactive accounts, thereby providing a clearer framework for both credit unions and their members. This amendment provides a protective measure for account holders, allowing them to maintain their membership without the burden of potential fees while their accounts are inactive. Additionally, if the designation of inactivity remains for a period defined by the uniform unclaimed property act, unclaimed funds would be transferred to the state treasurer, ensuring proper handling of member assets.

Summary

Senate Bill 388, approved in July 2024, amends the Michigan Credit Union Act to introduce a designation for inactive accounts held by members of domestic credit unions. This change allows members to classify their accounts as inactive, provided that all individuals associated with the account agree to this designation. While the account is inactive, the member retains their membership status but forgoes all associated privileges. Notably, credit unions are prohibited from charging fees on inactive accounts, creating a more user-friendly approach to managing dormant memberships.

Sentiment

The sentiment surrounding SB 388 has been largely positive, particularly among credit unions and their members who stand to benefit from the flexibility and consumer-friendly nature of the amendments. Supporters argue that this will enhance member satisfaction and promote financial responsibility. The absence of fees while accounts are inactive is also seen as a positive step, especially for those who may encounter financial hardships and cannot maintain active membership statuses.

Contention

Despite the positive reception of the bill, some concerns have been raised regarding the potential implications for account inactivity and its management. Critics point out the importance of ensuring that members are consistently informed about the status of their accounts, particularly as funds may be subject to unclaimed property laws. Nevertheless, the overall discussion suggests a consensus that the changes introduced by SB 388 provide a beneficial framework for handling inactive membership accounts effectively.