Governor signs Connecticut modernization bill

In a significant legislative win for Connecticut’s credit unions, Gov. Ned Lamont signed Public Act 25-37 into law, modernizing the state’s credit union statute and bringing greater alignment with federal standards. Spearheaded by the Credit Union League of Connecticut (CULCT), this new law brings meaningful regulatory relief and operational flexibility to the state’s credit unions.

“On behalf of the members who advocated for these changes, we are pleased to provide this win for all Connecticut credit unions. We are listening to our credit unions who consistently ask for a more level playing field with their federally chartered counterparts and advocating for a more efficient, mission-aligned statutory framework,” said Bruce Adams, president/CEO of CULCT. “This legislation continues our relentless work to help credit unions compete fairly and grow responsibly, while meeting the evolving needs of member and their communities.”

Key provisions modernize elements of the Connecticut General Statues governing credit unions. When Public Act 25-37 takes effect July 1, it will:

• Allow credit unions designated as Community Development Financial Institutions (CDFIs) to accept non-member deposits up to capped thresholds based on total assets;
• Exempt certain loans from the definition of “member business loans;”
• Revise the definition of “capital” and “net worth,” excluding regular reserves from certain calculations and better reflecting real financial health under modern accounting standards;
• Allow credit unions to extend preferential credit terms to insiders, employees, and board members if done under a formal policy that prevents financial loss and eliminates conflicts of interest; and
• Authorize a certain amount of charitable contributions without board approval.

CULCT worked in close partnership with state lawmakers, credit union leaders, and financial regulators to ensure this legislative effort would enhance operational clarity while upholding the principles of safety and soundness. The bill passed with strong bipartisan support.