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Committee hears bill allowing private share insurance as alternative for state‑chartered credit unions
Summary
Witnesses told the Rules Committee HB 5783 would let state‑chartered credit unions use private share insurance in lieu of federal coverage, with state oversight and federal disclosure requirements retained; American Share Insurance (ASI) speakers described their reserves and experience.
Representative Harris introduced House Bill 5783, part of a package that would let Michigan credit unions obtain private share insurance as an alternative to federal deposit insurance (NCUA/FDIC analogues). The bill authorizes the director of the Department of Insurance and Financial Services (DIFS) to share confidential documentation with a private share insurer for regulated purposes provided confidentiality protections are met.
Kieran Marian of the Michigan Credit Union League told the committee the proposal responds to regulatory uncertainty and that some members want an alternative to federal insurance; he said about 10 states already authorize private share insurance. Kurt Los, chief operating officer for American Share Insurance (ASI), described ASI as a mutual guarantor founded in 1974, stated ASI insures deposits up to $250,000 per account and said ASI has a long record of paying insured members in prior credit union failures.
Committee members asked about the difference between federal insurance and private coverage, the backing of ASI, and whether disclosures would be required for customers. Witnesses said ASI is mutual and backed by member credit unions, that ASI maintains reserves and committed liquidity, and that federal disclosure rules require institutions insured privately to display notices making clear they are not federally insured. The witnesses said the state regulator retains supervisory authority and that any conversion from federal to private insurance would require state approval.
No committee vote on HB 5783 was recorded at this meeting.
