Credit union bill wins committee approval.

The Senate Banking Committee approved, by a 16 to 2 vote, a bill that would impose new audit requirements on credit unions. The Credit Union Membership Access Act (HR 1151) is intended to protect and preserve credit unions and their members while keeping their business practices safe and sound. The House approved HR 1151 on April 1.

The bill requires credit unions with over $500 million in assets to obtain an annual audit of their financial statements. It also requires credit unions with over $10 million in assets to follow GAAP, or accounting principles prescribed by the National Credit Union Association (NCUA) that are no less stringent than GAAP, for financial statements and reports filed with the NCUA.

The NCUA presently allows supervisory committees to engage nonlicensed individuals to perform an opinion audit on their behalf. Senate Banking Committee Chairman Alfonse M. D'Amato (R-N.Y.) said in a statement that the requirements for the voluntary use of outside auditors are in compliance with state accountancy laws, including licensing requirements.

The bill sets up three kinds of common bond formations: single common bond, multiple common bond and community credit unions. It grandfathers all current bond arrangements and ensures that credit unions will not be able to expel current members.

The bill now must win full Senate approval; however, it is not likely that it will reach the Senate floor until the fall.