HB515, which amends the laws governing credit unions, took effect July 1. The bill, which passed the NC General Assembly, was signed into law by Governor Pat McCrory June 19.
The majority of the changes HB515 ushers in create consistency with NC's banking laws as it relates to account provisions. The most notable changes deal with minor accounts and a credit union's investment authority but others are also outlined below:
- Minors - The Credit Union Act was previously silent on minor accounts. The addition of two provisions under HB 515 allows a credit union to 1) deal with a minor like an adult for the purposes of share or deposit accounts and 2) create a simple custodial share account that one or more adults may open for a minor. The addition of a custodial share account was designed to address operational challenges in the existing laws under the Uniform Transfers to Minors Account Act and simplifies the process for opening accounts for minors.
- Investment Authority - Under North Carolina law, state-chartered credit unions are permitted to invest in corporate bonds but are currently limited in making investments that have a AAA credit rating. The change under the investment provisions now allows a state-chartered credit union to invest in investment grade corporate bonds with at least A+ or equivalent rating, expanding a state-charter’s investment authority. State-chartered banks would still have a lower credit rating threshold of BAA.
- Joint Accounts - Any joint account holder can now terminate a joint account or have his or her name removed from the account.
- Proper procedures are now outlined under the Credit Union Act for dealing with accounts of decedents who were under a disability or had been found incompetent.
- Powers of Attorney (POA) - The addition of this section provides clarity on when a credit union can rely on POAs without liability - until the time of receipt of actual notice of the principal’s death or a written notice of revocation signed by the principal. This creates consistency with NC banks in dealing with POAs.