California’s Credit Unions engaged on two important regulatory matters this week.

PAGA Rulemaking

California’s Credit Unions remains actively engaged in the implementation of the 2024 reforms to the Private Attorneys General Act (PAGA), continuing its participation in the rulemaking process through coalition comments and public proceedings.

The California league once again joined a broad coalition led by the California Chamber of Commerce in submitting comments on the latest proposed PAGA regulations.

The coalition’s comments focus on strengthening accountability for PAGA filers and preventing unintended consequences for employers. Key recommendations include:

• Strengthening accountability for high-frequency and non-compliant filers by closing loopholes that could allow law firms or individual attorneys to avoid accountability.
• Preventing abuse of the settlement process by protecting employers from duplicative PAGA actions or tactics designed to disrupt good-faith settlements.
• Limiting notice requirements to PAGA actions involving overlapping claims and affected employee groups, reducing unnecessary burdens and potential gamesmanship.
• Protecting existing settlements from new regulatory requirements that could retroactively disrupt agreements already reached in good faith.
• Preserving the ability to privately resolve individual PAGA claims when an employee has not filed a PAGA notice against the employer.
• Requiring greater specificity in PAGA notices, including sufficient information about the location and dates of alleged workplace safety violations to allow for appropriate investigation.

Mergers and Acquisitions

California’s Credit Unions also submitted comments to the California Law Revision Commission as part of its ongoing Study B-750 — Mergers and Acquisitions. The California league urged the Commission to recognize the unique structure of credit unions before recommending changes to California’s merger laws.

Credit unions are nonprofit, member-owned financial cooperatives — not shareholder-driven businesses — and their mergers already are subject to member approval and extensive state and federal regulatory oversight. The league expressed concern that applying a new, broad merger standard to credit unions could add unnecessary cost, complexity, delay and uncertainty to transactions that are often undertaken to strengthen financial resilience, address succession challenges, improve technology and compliance capabilities, or preserve and expand services for members.

The league urged the commission to:

• Proceed cautiously and focus any new requirements on demonstrated competitive harm.
• Exempt credit unions or provide tailored treatment that recognizes their unique structure and existing regulatory framework.
• Avoid rigid concentration thresholds and vague standards that may not translate well to the credit union model.
• Coordinate with existing state and federal oversight to avoid duplicative or conflicting merger reviews.

California’s Credit Unions also appreciates the credit unions that participated in the task force and provided valuable feedback that helped inform the league’s comments.