The New York Credit Union Association submitted a letter to the state Department of Financial Services backing the department’s proposed plans to ease restrictions on school banking programs for state-chartered credit unions. The letter, written by Association President/CEO William J. Mellin, urges the department to move forward with its plans to utilize its “wildcard powers” to ensure parity between state and federal credit unions when it comes to in-school banking.
Under the state wildcard law, state-chartered credit unions, banks and thrifts are provided with the opportunity to exercise the same banking powers that are available to federally chartered institutions.
In his letter, Mellin pointed out the current disparity that exists for state and federal credit unions that wish to operate a school banking program, explaining that no state-chartered credit unions currently operate an in-school branch due to the current legal framework.
The Association “respectfully submits that the proposed framework for student branching by state-chartered financial institutions protects the public interest and is necessary to achieve parity between state and federally-charted credit unions, and therefore satisfies the requisite conditions for the use of wildcard power,” wrote Mellin.
Mellin noted that, currently, credit union membership would expire for student-members 30 days after they are no longer enrolled at the school—a stipulation that doesn’t exist for federal credit unions.
He went on to explain that school banking programs promote youth financial literacy and youth savings, and he commended the DFS for proposing to open membership eligibility to school staff and faculty.
However, Mellin urged the department to also include parents and legal guardians as potential members, noting that it would be “wholly consistent with the credit union movement’s focus on community and building a better financial future for all.”