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SAINT PAUL, Minn. - Governor Tim Walz has signed into law a bill to bring parity to state-chartered financial institutions and allow them to offer checking accounts to people that have had accounts closed within the preceding 12 months, just like federally chartered institutions are able to now. The bipartisan bill, authored by Senator Karin Housley and Representative Jim Davnie, passed the Senate and House unanimously. Prior to this legislation, Minnesota statute forbade any state chartered financial institution from opening transaction accounts for people that have had accounts forcibly closed because of dishonored checks within the previous 12 months, or the person has been convicted of a check related criminal offense in the previous 24 months. Minnesota’s Credit Unions advocated to change this law to expand financial opportunities for all Minnesotans. “This bill is a simple step to give thousands of Minnesotans economic opportunity, and avoid predatory financial practices like payday loans and check-cashing stores,” House author Rep. Jim Davnie (DFL-Minneapolis) said. “Opening an account at a financial institution is an important first step to financial inclusion and building economic security.” According to the FDIC, the unbanked rate in Minnesota is approximately 3%. Additionally, the Prosperity Now Scorecard notes the overall underbanked rate in Minnesota is 9.6%, and for households of color that number increases to nearly 33%. “Months of work went into this bill to ensure we had the best language, and I’m thrilled to have Governor Walz’s support in this effort,” Senate author Sen. Karin Housley said. “Too often, people face a bad run with their finances, which can lead to the closure of their checking and banking accounts. These people are then unable to open another checking account for a year, and are then left to rely on alternatives like check-cashing stores that charge higher fees.” “This legislation provides state-chartered credit unions the ability to what they do best - to work with their members who are in a tough financial situation instead of requiring them to rely on check cashing services and other more costly non-mainstream financial services,” said Mara Humphrey, Chief Advocacy Officer of the Minnesota Credit Union Network, the state trade association who helped craft the bill. This legislation provides state credit unions the opportunity to create programs designed to expand access to financial services for individuals who do not possess a transaction account,” continued Humphrey. What credit unions leaders from across Minnesota are saying: “There are many downfalls that come with not having a bank account, including a stigma that creates difficulties in simply buying the basic goods and services that one needs in order to thrive in life,” said Nicholas Mathiowetz, President & CEO of Northridge Community Credit Union. “Being able to offer a second chance checking account would have an incredible impact on the financial wellness of our members, our community, and our region.” ldquo;The bill crafted by the Minnesota Credit Union Network keeps statutory protections in place for financial institutions, and creates a pathway for consumers that may need a second chance,” said Kathy Harrington, CEO of Heartland Credit Union. “My Credit Union looks forward to helping more consumers get on the path toward rebuilding their financial wellbeing,” said Greg Worthen, President and CEO of My Credit Union. “That is what the credit union difference is all about.” The Minnesota Credit Union Network is the statewide trade association that works to ensure the success, growth and vitality of Minnesota credit unions. With nearly $27 billion in assets, Minnesota credit unions are local, trusted financial cooperatives that serve more than 1.9 million members at almost 400 branch locations around the state. As not-for-profit institutions, credit unions give back to the communities they serve. For more information, visit mncun.org.
The bipartisan bill, authored by Senator Karin Housley and Representative Jim Davnie, passed the Senate and House unanimously.
Prior to this legislation, Minnesota statute forbade any state chartered financial institution from opening transaction accounts for people that have had accounts forcibly closed because of dishonored checks within the previous 12 months, or the person has been convicted of a check related criminal offense in the previous 24 months.
Minnesota’s Credit Unions advocated to change this law to expand financial opportunities for all Minnesotans.
“This bill is a simple step to give thousands of Minnesotans economic opportunity, and avoid predatory financial practices like payday loans and check-cashing stores,” House author Rep. Jim Davnie (DFL-Minneapolis) said. “Opening an account at a financial institution is an important first step to financial inclusion and building economic security.”
According to the FDIC, the unbanked rate in Minnesota is approximately 3%. Additionally, the Prosperity Now Scorecard notes the overall underbanked rate in Minnesota is 9.6%, and for households of color that number increases to nearly 33%.
“Months of work went into this bill to ensure we had the best language, and I’m thrilled to have Governor Walz’s support in this effort,” Senate author Sen. Karin Housley said. “Too often, people face a bad run with their finances, which can lead to the closure of their checking and banking accounts. These people are then unable to open another checking account for a year, and are then left to rely on alternatives like check-cashing stores that charge higher fees.”
“This legislation provides state-chartered credit unions the ability to what they do best - to work with their members who are in a tough financial situation instead of requiring them to rely on check cashing services and other more costly non-mainstream financial services,” said Mara Humphrey, Chief Advocacy Officer of the Minnesota Credit Union Network, the state trade association who helped craft the bill. This legislation provides state credit unions the opportunity to create programs designed to expand access to financial services for individuals who do not possess a transaction account,” continued Humphrey.
What credit unions leaders from across Minnesota are saying:
“There are many downfalls that come with not having a bank account, including a stigma that creates difficulties in simply buying the basic goods and services that one needs in order to thrive in life,” said Nicholas Mathiowetz, President & CEO of Northridge Community Credit Union. “Being able to offer a second chance checking account would have an incredible impact on the financial wellness of our members, our community, and our region.”
ldquo;The bill crafted by the Minnesota Credit Union Network keeps statutory protections in place for financial institutions, and creates a pathway for consumers that may need a second chance,” said Kathy Harrington, CEO of Heartland Credit Union.
“My Credit Union looks forward to helping more consumers get on the path toward rebuilding their financial wellbeing,” said Greg Worthen, President and CEO of My Credit Union. “That is what the credit union difference is all about.”
The Minnesota Credit Union Network is the statewide trade association that works to ensure the success, growth and vitality of Minnesota credit unions. With nearly $27 billion in assets, Minnesota credit unions are local, trusted financial cooperatives that serve more than 1.9 million members at almost 400 branch locations around the state. As not-for-profit institutions, credit unions give back to the communities they serve. For more information, visit mncun.org.