In a landmark move for the credit union industry, the Michigan Commissioner of Financial and Insurance Regulation has signed an order authorizing credit union service organizations (CUSOs) to provide small business equity investments to Michigan credit unions and their members.
The move comes after months of proactive advocacy by the Michigan Credit Union League on behalf of the state’s credit unions and CUSOs.
“This is an unprecedented step forward for credit unions,” David Adams, CEO of the Michigan Credit Union League & Affiliates said. “Business investing authority has tremendous potential benefits to credit unions and to the small business community at large. It is further proof that there is nothing small about the credit union commitment to supporting small businesses. MCUL and CUcorp plan to work aggressively with our credit union community on a structure and business plan that will take advantage of this new opportunity. CUcorp is well positioned to facilitate this.” Adams added.
In his ruling, Commissioner R. Kevin Clinton noted that based on a review of applicable laws, and with all consideration of safety and soundness, “It is necessary and proper for CUSOs to offer small business equity and venture capital investment administration and related services to its member credit unions and their respective members.”
MCUL began the process necessary to achieve this new authority in October 2011, and was able to do so through the existing regulatory process, without any statutory amendments.
The new authority allows state chartered credit union investment in CUSOs that provide investment administration and other services related to small business equity or venture capital funding.
Full details of the new authority can be found by clicking here.