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As credit unions work to meet the needs of more than 134 million Americans, NAFCU's award-winning regulatory compliance team continues to keep credit unions informed with new posts on the Compliance Blog. Yesterday, Director of Regulatory Compliance Nick St. John highlighted a pair of recently passed California laws that could impact credit unions this year.

In the post, St. John discussed the Military and Veteran Consumer Protection Act of 2022, which he noted seems to be “designed to prevent credit unions and other lenders from taking advantage of certain exceptions to the federal [Military Lending Act].” While NCUA rules and regulations preempt some state laws on certain topics, St. John said the way this law is written – to address the security interest in loans – means it may not be preempted and federal credit unions will “have to comply with the law’s restrictions when making loans to servicemembers in California.”

Additionally, the post detailed an amendment to California’s Financial Code. The law requires any credit union subject to examination by the California Department of Financial Protection and Innovation to report revenue and percent of net income from overdraft and nonsufficient funds fees from the most recent calendar year by March 1. Federal credit unions are examined by the NCUA rather than state regulators and would not be required to report; however, California state-chartered federally-insured credit unions would be covered by this law and potentially other state-chartered credit unions that are licensed to operate branches in California

St. John recommended credit unions confer with legal counsel to determine the impact of these laws on their operations.

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