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Bill

SD 1270

An Act allowing fair compensation of Massachusetts credit union directors

194th Legislature (2025-2026) Introduced by Pavel Payano

Allows Massachusetts credit unions to compensate directors for board/committee service; compensation is set by members at the annual meeting and approved by them.

House concurred
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Bill Summary · SD 1270

Summary: Senate Docket No. 1270 — An Act Allowing Fair Compensation of Massachusetts Credit Union Directors

Overview

  • Purpose: To authorize Massachusetts credit unions to compensate their directors for services rendered, including work on board committees. The compensation amount would be determined by the credit union’s members at an annual meeting.
  • Bill status: House concurred. Introduced February 27, 2025. Referred to the Committee on Financial Services on the same date. The act takes effect upon passage.

Key Provisions

  • Amendment to General Law: Section 20 of Chapter 171 of the General Laws is amended.
  • New language (core change):
    • Any credit union may compensate each member of the board of directors for services as a director or as a member of any committee.
    • The compensation amount can be fixed by the credit union’s members at an annual meeting.
  • Effective date: The act takes effect upon passage.

Affected Parties and Governance Impacts

  • Entities Impacted: All Massachusetts credit unions governed under Chapter 171.
  • Directors and Committees: Credit union directors (and any committees they serve on) may receive compensation for their services.
  • Member Involvement: Compensation levels must be approved by the credit union’s members at an annual meeting, preserving member control over director compensation.

Procedural and Timeline Aspects

  • Introduction: February 27, 2025.
  • Legislative Actions:
    • Referred to the Committee on Financial Services (2025-02-27).
    • House concurred (2025-02-27).
  • Effective Date: Upon passage (immediate effect once enacted).

Potential Impacts and Considerations

  • Governance and Recruitment: Allowing compensation could improve director recruitment and retention and recognize the time commitment involved in board service.
  • Financial and Budget Implications: Compensation would require budgeting and potentially annual member approval; local credit unions would need to establish compensation policies.
  • Accountability and Transparency: Member-approved compensation supports governance transparency; credit unions may implement guidelines to ensure reasonable, fair compensation.
  • Safeguards: To minimize conflicts of interest or abuse, continued member oversight at annual meetings is essential; credit unions may consider adopting maximum caps or clear criteria for compensation.

This summary captures the bill’s core intent, the main change to the General Laws, who is affected, and the key procedural milestones and timing. If you’d like, I can add a side-by-side comparison with current law or provide a brief Q&A for credit union boards and members.

Compiled from official sources — confirm details with the bill’s official record.

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