House approves credit-union overhaul; task force and fee delay included

The Utah House on the floor concurred with Senate amendments to the fourteenth substitute of House Bill 162, a package of changes to the state Credit Union Act that alters how credit unions become ‘‘nonexempt’’ and delays implementation of a proposed franchise/equity fee.

Representative Jason B. Alexander, the bill sponsor, said the substitute clarifies that a ‘‘nonexempt’’ credit union is one whose field of membership is a full county — and that to meet that test a union would need members from two counties with at least two being first- or second-class counties. He said the bill preserves an asset-based exemption structure for smaller counties and keeps restrictions on branching, mergers and loan participations intact.

‘‘To be a non exempt credit union, this would be a credit union with where their, their field of membership is a full county,’’ Alexander said, summarizing the revised membership thresholds and other technical changes.

Representative Christiansen, a critic of the final substitute, said the earlier principled, structure-focused approach was weakened in later substitutes and warned the bill no longer ties exemption to cooperative structure. ‘‘By the time it got to be the fourteenth substitute, the entire philosophical principled basis of this body's decision was gutted,’’ he said.

Supporters argued the substitute struck an acceptable compromise. Representative Jones called the outcome ‘‘good’’ and praised lawmakers for closing a wide gap by negotiating language he said balanced competing concerns. Representative Alexander and others pointed to a two-year task force that will study the franchise/equity question, delaying any immediate 5% fee while the panel reviews structural and competitive issues.

The bill also keeps limits on member business loans and caps on commercial lending: sponsor remarks and floor managers pointed to a $250,000 threshold in the bill language for business loans associated with exempt unions and stiffer limits for nonexempt unions.

After debate and a motion for the previous question, the House voted to concur with the Senate amendments. The clerk recorded 55 yes votes and 20 no votes; the bill will be returned to the Senate for the president's signature.

The measure sends the credit-union changes to the next step while creating a two-year study process intended to resolve longer-term policy questions. Provisions left for the task force include whether and how an eventual franchise or equity fee should be applied and how exemptions should reflect cooperative structure.