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HB 2537

Financial Institutions, Dept. of - As enacted, terminates the state credit union share insurance corporation that protects or guarantees shareholdings and deposits of member credit unions against loss; terminates the capital fund held by the corporation that consists of capital contributions and special assessments paid by member credit unions; makes other revisions pertaining to credit unions. - Amends TCA Title 45, Chapter 2; Title 45, Chapter 4 and Title 45, Chapter 7.

114th Regular Session (2025-2026) Introduced by William Lamberth

Bill eliminates Tennessee's state credit union deposit insurance corporation, removing state-level protection for member shares and deposits in state-chartered credit unions.

Comp. became Pub. Ch. 671
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Bill Summary · HB 2537

Legislative bill overview

HB 2537 would eliminate Tennessee's state credit union share insurance corporation (CSIC), which currently insures member deposits and shareholdings in state-chartered credit unions. The bill would dissolve the capital fund built from member contributions and assessments that backs this insurance protection. This represents a fundamental shift in how state credit unions maintain deposit security in Tennessee.

Why is this important

Credit union members rely on share insurance to protect their deposits against institutional failure—currently mirroring federal NCUA insurance but at the state level. Eliminating state-level protection could leave members dependent entirely on federal NCUA coverage (if applicable) or expose them to uninsured losses if their credit union fails. This affects thousands of Tennessee residents and could impact credit unions' ability to attract and retain members.

Potential points of contention

  • Deposit security gap: Members may lose state-level insurance protection, creating potential coverage gaps for deposits exceeding federal insurance limits or for credit unions not federally insured
  • Credit union competitiveness: Elimination could disadvantage Tennessee state-chartered credit unions relative to federally-chartered competitors offering NCUA protection, potentially driving members away
  • Capital fund disposition: Unclear what happens to accumulated capital contributions and assessments paid by member credit unions over time—refunds, forfeiture, or other allocation
  • Consumer confidence: Removing insurance protections may reduce public confidence in the credit union system and impact lending/deposit availability

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

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