HB 5732 Summary

• Amends the Credit Union Act to allow domestic credit unions to organize, invest in, or loan money to credit union service organizations providing specified products and services to credit unions and their members.

• Expands the list of permissible credit union service organization activities to include equipment leasing, payroll services, real estate brokerage, insurance, financial planning, trust services, and various other financial and administrative services.

• Adds provisions allowing credit union service organizations to provide investment administration and venture capital fund services for small business equity interests, subject to conditions including membership verification, 51% funding requirement for in-state businesses, and limits on individual credit union investment exposure at 10% of net worth.

• Establishes operational requirements for credit union service organizations including adequate capitalization, separate legal entity status, written legal opinions limiting liability, quarterly financial statements, annual audits by certified public accountants, and compliance with applicable laws.

• Requires credit union boards to establish in writing maximum percentage limits on assets invested in or loaned to service organizations and prohibits senior management employees from receiving compensation from affiliated service organizations.