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HB 5781

Financial institutions: credit unions; insurance from a qualified private insurance organization; allow for foreign credit unions. Amends sec. 501 of 2003 PA 215 (MCL 490.501). TIE BAR WITH: HB 5779'26, HB 5780'26, HB 5782'26, HB 5783'26

2025-2026 Regular Session Introduced by Brian BeGole and 6 co-sponsors

Allows non-federal foreign credit unions to operate in Michigan only with state approval and strict conditions to protect consumers and ensure oversight.

REFERRED TO COMMITTEE ON FINANCE, INSURANCE, AND CONSUMER PROTECTION
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Bill Summary · HB 5781

Summary of Michigan HB 5781 (2025-2026)

Purpose and intent

  • HB 5781 amends the Michigan Credit Union Act (2003 PA 215) by modifying Section 501 to govern whether foreign (non-Mederal) credit unions can conduct business in Michigan.
  • The bill provides a framework for approving foreign credit unions to operate in the state, subject to conditions intended to protect Michigan consumers and ensure consistent regulatory oversight.

Key provisions and changes

  1. Approval to operate in Michigan (new eligibility criteria)

    • A foreign credit union, other than a federal credit union, may conduct business in Michigan only with written approval from the Michigan Department of Insurance and Financial Services (DIFS) – referred to as the “commissioner director.”
    • Approval is contingent on meeting all of the following:
      • Organized under a law similar to Michigan’s Credit Union Act.
      • Financially solvent.
      • Insured for member share and deposit accounts by:
      • A federal agency insuring such accounts, or
      • A qualified private insurance organization (as defined in section 387).
      • Examined and supervised by the supervisory authority of the state/territory where it is organized.
      • Demonstrates that it will adequately serve Michigan members.

  2. Conditions attached to approval (written agreement)

    • If approved, the foreign credit union must agree in writing to:
      • Charge interest rates not exceeding those permitted by the federal Credit Reform Act for loans in Michigan.
      • Comply with the same consumer protection laws applicable to domestic credit unions for loans and services provided in Michigan.
      • For purposes of this requirement, a loan is considered made in Michigan if signed by a debtor while physically in Michigan (or, for non-loan services, if the service is provided in Michigan without the customer traveling outside the state to obtain it or the service agreement is signed in Michigan).
      • Designate and maintain a registered agent for service of process in Michigan.
      • File any reports required by the director.
      • Allow examinations by the director to the same extent as examinations of domestic credit unions.
      • Meet any additional requirements the director imposes that apply to domestic credit unions.

  3. Reciprocity and limiting factors

    • The director cannot grant approval if the state/territory where the foreign credit union is organized does not permit Michigan-based credit unions to do business there.
    • The measure does not exempt foreign credit unions from Michigan laws beyond what is otherwise required.

  4. Enactment conditions (tied to other bills)

    • This act is a tie-bar bill and will take effect only if related bills in the 103rd Legislature are enacted:
      • HB 5779, HB 5780, HB 5782, and HB 5783 (all related to the same legislative package in 2025-2026).

Who is affected

  • Foreign (non-federal) credit unions seeking to operate in Michigan may be subject to new approval and ongoing compliance requirements.
  • Michigan residents and consumers who use or might use services from foreign credit unions could gain access to additional options but must be protected by the same consumer protection standards and supervisory oversight as domestic credit unions.
  • Domestic credit unions and Michigan regulators will coordinate with foreign credit unions under the same supervisory framework, including examinations, reporting, and service-of-process arrangements.

Procedural and timeline aspects

  • Approval process: Requires written approval from the Michigan director (DIFS) after evaluating eligibility criteria and the foreign credit union’s solvency, insurance, supervision, and service to Michigan members.
  • Written agreement: The foreign credit union must sign a compliance and service agreement outlining operational constraints and protections.
  • Reciprocity condition: Approval hinges on whether Michigan-based credit unions are allowed to operate in the foreign country/territory.
  • Enactment trigger: HB 5781’s effectiveness is contingent on the passage and enactment of four related bills (HBs 5779, 5780, 5782, 5783) in the 2025-2026 session.

Potential impacts and considerations

  • Enhanced access to foreign credit union products for Michigan consumers, subject to consistent consumer protection and supervisory standards.
  • Increased regulatory oversight for non-domestic credit unions operating in Michigan.
  • Potential for cross-border competition among credit unions, with safeguards ensuring solvent and properly insured entities serve Michigan members.
  • The tie-bar mechanism means the bill’s effective date is contingent on passage of companion bills, affecting timing of implementation.

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

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