California CUs Victorious: Committee Amends AB 1177

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Credit union leaders and supporters across California are celebrating their VICTORY in telling state assemblymembers “NO on Assembly Bill 1177” over the past few weeks and seeing their tireless efforts make a difference last night!

AB 1177 — which would create a high cost, government-run banking system that is completely duplicative of what’s offered by credit unions — passed out of the California Assembly Banking and Finance Committee yesterday evening, but not before it was significantly amended by Chair Tim Grayson.

Here are some key themes from last night’s HUGE VICTORY for the state’s credit unions:

  • The Chair, with the help of some key committee members, was able to convince the author to amend the bill to include a market analysis contracted to one or more third-party entities before any state dollars are spent, with the legislature independently approving the study before BankCal can be implemented.
  • Assemblymembers Phillip Chen, Jesse Gabriel, and Autumn Burke also brought up concerns that the board-run banking system should have more experts from industry and academia.
  • Assemblymember Rebecca Bauer-Kahan asked that the study look at less risky methods of banking the unbanked.

The final committee vote was 7-4-1 (“yes,” “no,” and one “abstention”). Voting “yes” to pass the bill with amendments were Assemblymembers Tim Grayson, Rebecca Bauer-Kahan, Jesse Gabriel, Autumn Burke, Sabrina Cervantes, Mark Stone, and Buffy Wicks. Voting “no” were Assemblymembers Phillip Chen, Steven Choi, Janet Nguyen, and Cottie Petrie-Norris. The one “abstention” was Assemblymember Cristina Garcia.
 
While the California Credit Union League will review these amendments, this bill came a long way from the bill credit unions lobbied against during the League's California Government Relations Rally (GRR) earlier this month.

"We want to THANK YOU and everyone else who helped lay the groundwork during GRR," said League President and CEO Diana Dykstra in a special message to all the state's credit union leaders. "More than 4,500 Connect for the Cause messages were sent to state lawmakers since then, initiated by 177 credit unions. These messages and your participation in GRR were pivotal in winning this legislative battle."
 
The League also wants to thank credit union leaders who worked to submit AB 1177-opposition opinion pieces to local news media editorial boards. As of Friday morning, 24 opinion articles had been published. Some were directly submitted by credit union CEOs and the League, and others were editorial-board pieces that were highly influenced by the movement's “NO on AB 1177” efforts.
 
The League will update credit unions as AB 1177 moves through the legislative process. For questions, email Robert Wilson.

Credit unions should stand by for any changes and be ready for potential future legislative fights.

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