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HB 5780

Financial institutions: credit unions; insurance from a qualified private insurance organization; allow for domestic credit unions during certain conversions. Amends sec. 373 of 2003 PA 215 (MCL 490.373). TIE BAR WITH: HB 5779'26, HB 5781'26, HB 5782'26, HB 5783'26

2025-2026 Regular Session Introduced by Brian BeGole and 5 co-sponsors

Allows domestic credit unions to convert to a mutual savings bank/association with detailed member notices, 2/3 board vote, 2/3 member vote, and insured deposits.

REFERRED TO COMMITTEE ON FINANCE, INSURANCE, AND CONSUMER PROTECTION
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Bill Summary · HB 5780

Summary of HB 5780 (Michigan, 2025-2026)

Purpose and intent

HB 5780 proposes to amend the Michigan Credit Union Act (2003 PA 215, as amended) to allow domestic credit unions to convert into a mutual savings bank or mutual savings association under a formal set of notice, disclosure, and voting requirements. The bill also specifies that deposits in the resulting institution must be eligible for federal insurance or coverage by a qualified private insurance organization. The measure is paired (tied) with several related bills (HB 5779, HB 5781, HB 5782, HB 5783).

Key objective: Create a structured, member-informed process for domestic credit unions to convert to a mutual savings bank or mutual savings association, including enhanced disclosure and protections for members and regulatory oversight.

Key provisions and changes

  • Locus of change: Section 373 of the Michigan Credit Union Act, as amended by 2004 PA 471.

  • Conversion eligibility and process:

    • A domestic credit union may convert to a mutual savings bank or mutual savings association, subject to detailed procedural requirements.
    • Before any vote, the credit union board must provide written notice to all members at least 30 days prior to the vote. The notice must be mailed separately (no other mailings with it) and include:
    • Why conversion is being considered.
    • Major positive and negative effects of the proposed conversion.
    • A request for members’ written comments.

  • Board action and plan requirements:

    • The board must approve a plan of conversion by a two-thirds (2/3) vote of the entire board.
    • The plan must disclose advantages/disadvantages, and state any material differences in powers between the credit union and the proposed mutual savings entity.
    • The plan must not be intended to circumvent regulatory actions, must not provide insiders with remuneration, and must show that the resulting mutual entity would be economically viable.

  • Member vote and notice requirements:

    • A special member meeting must be called to vote on the conversion plan, with notices sent to members at least 90 days before the meeting.
    • Notices for the 90-day window must include:
    • Summary of positive/negative effects.
    • Statement that officials will not receive remuneration related to the conversion.
    • Information on how to obtain more detail from the credit union.
    • Authorization for the board to amend or terminate the plan based on regulatory input or other reasons.
    • How to obtain a copy of the plan.
    • Date, time, place of the meeting, and voting method options (in-person or by mail; alternative methods may be allowed with prior regulatory approval).
    • Any other information required by the director.
    • A 60-day posting requirement: notices must be posted in each branch/service center in at least 12-point type, visible to members.
    • A 60-day online posting requirement if the credit union operates an internet site.

  • Voting mechanics:

    • At the special meeting, a 2/3 vote of members voting is required to approve the conversion.
    • Members may vote in person or by mail. An alternative voting method may be used with prior approval of the director to ensure all members have a voting opportunity.

  • Documentation and regulatory filings:

    • If approved, the credit union must file with the director certified copies of proceedings, member comments, any approvals/consents from state or federal regulators, and verification that deposits will be insured (federal insurance or qualified private insurance organization).

  • Insurance of deposits post-conversion:

    • The plan must verify that deposits in the converted entity will be insured either by a federal agency or by a “qualified private insurance organization” as defined in the bill (reference to section 387 for the definition).

  • Effect and timing:

    • The act’s provisions apply only after the related bills in the tie-bar are enacted (HB 5779, 5781, 5782, 5783), suggesting a package of interrelated reforms.

  • Interim protections:

    • The bill includes protections against acting to evade supervisory actions and against providing board or staff remuneration tied to the conversion.

Who is affected

  • Domestic credit unions considering a conversion to a mutual savings bank or mutual savings association.
  • Credit union members who would vote on the conversion and receive disclosures.
  • Regulators (Michigan Department of Insurance/Director) overseeing conversions and ensuring proper notices, disclosures, and fair voting processes.
  • The resulting mutual savings institution and its deposit insurance arrangements (federal insurance or qualified private insurer).

Procedural and timeline aspects

  • Notice timeline:

    • At least 30 days before voting (initial notice to members).
    • Special meeting notices must be sent at least 90 days before the meeting; and 60 days for branch postings and website postings.
    • A 30-day pre-vote notice for the actual meeting including date, time, place and ballots.

  • Voting thresholds:

    • Board approval requires a 2/3 vote of the entire board.
    • Member approval requires a 2/3 vote of members voting at the special meeting.

  • Post-conversion filings:

    • Required to file with the director copies of proceedings, member comments, regulatory consents, and deposit insurance verification.

  • Effect of passage:

    • The act is contingent on the enactment of the linked bills in the tie bar, indicating a coordinated package of changes.

Note

This summary focuses on the substantive content and does not reflect potential accompanying fiscal analyses or regulatory guidance that may accompany the bill if enacted.

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

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