On Wednesday, Sens. Catherine Cortez Masto (D-NV) and Bernie Moreno (R-OH) introduced bipartisan legislation to make it easier for credit unions to choose private insurance over federal insurance. The Private Insurance Parity Act would allow credit unions merge with or convert to a privately insured institution if a simple majority of its voting members approve of the action.
The bill is: S. 4808, the Insurance Parity Act.
Advancing this legislation is an important step toward ensuring all credit unions are treated fairly under federal law, said Jeremy Empol, president and CEO of California’s and Nevada’s Credit Unions, and Theresa Mason, president and CEO of ASI.
“Modernizing outdated conversion and merger requirements promotes parity for privately insured credit unions, strengthens consumer choice, supports innovation, and reinforces state-chartered institutions’ ability to meet the evolving needs of their members,” they said. “By providing equal treatment under federal law, this legislation helps preserve a strong and diverse credit union system that benefits consumers and communities alike.”
This legislation would give Nevada credit unions the flexibility they need to become privately insured if that works best for them and their customers. Obtaining private insurance through American Share Insurance (ASI) allows credit unions to insure larger accounts and better serve a wide range of industries, but it currently takes 20 percent or more of a credit union’s total members to participate in a vote and approve such an action in a very short timeframe.
This requirement also applies to credit union mergers when one of the credit unions has private insurance. This burdensome requirement makes it harder for credit unions to seek private insurance. Cortez Masto’s bipartisan bill would replace the 20 percent total membership turnout requirement with a simple majority of voting members and extend the vote to at least 90 days.
Cortez Masto said credit unions help hundreds of thousands of Nevadans grow their savings, buy their homes, and build their credit. “Private insurance gives these credit unions the flexibility to serve more customers,” she added. “This commonsense fix will make it easier for our nation’s credit unions to seek private insurance or merge with privately-insured credit unions.”
Silver State Schools Credit Union’s experience with ASI demonstrates that privately insured credit unions can operate safely, soundly, and successfully while delivering exceptional value to their members, said Scott Arkills, CEO of Silver State Schools Credit Union.
“What sets private insurance through ASI apart is that they understand credit unions and work alongside them to find solutions,” Arkills said. “Their support has helped us navigate challenges in the past, strengthen our institution, and consistently deliver financial and operational value to our members. We are a stronger organization today because of that partnership. The Privately Insured Credit Union proposed legislation empowers credit unions to make decisions based on what is best for their members and provides regulatory parity and modernization for today’s financial services landscape.”
By co-sponsoring the Privately Insured Credit Unions Conversion Modernization Act, Cortez Masto is helping to remove outdated regulations that create an obstacle for Nevada credit unions, said Matt Kershaw, CEO of Create Credit Union.
“When credit unions can select the insurance that is best for them and their members, it allows the option of private insurance which offers even more coverage per person, instead of per account,” Kershaw said. “Currently, privately insured credit unions serve over 172,000 Nevadans and Cortez Masto recognizes the vital role that privately insured credit unions like Create Credit Union play in the state of Nevada.”
The full text of the legislation can be found here.
Cortez Masto is a consistent champion for Nevada’s credit unions and other small businesses. She has introduced bipartisan legislation to increase the Federal Deposit Insurance Corporation (FDIC) cap on deposit insurance, allow credit unions more flexibility when lending for non-primary residence loans, and reform the Federal Home Loan Banks to ensure they continue to invest in credit unions.
Cortez Masto is also leading bipartisan legislation to ensure America’s small businesses can compete in the 21st Century economy and to make it easier for the Securities and Exchange commission to collect information on small businesses.
