SAINT PAUL, Minn.–Legislation backed by Minnesota’s credit unions that would provide 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—has been signed into law.
Gov. Tim Walz (D) signed the bill that had been authored by Sen. Karin Housley (R) and Rep. Jim Davnie (DFL-Minneapolis) and which passed the Senate and House unanimously.
The Minnesota Credit Union Network noted that prior to the legislation Minnesota statute forbade any state-chartered financial institution from opening transaction accounts for people who 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.
The MnCUN said the state’s credit unions advocated to change this law to “expand financial opportunities for all Minnesotans.”
The MnCUN cited FDIC data showing 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%, the Network added.
‘Do What They Do Best’
“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.”