Following intensive negotiations between NC House and NC Senate leaders, a compromise committee substitute for Senate Bill 595 (Various Revenue Law Changes) has been placed on the House and Senate calendars for a vote on Tuesday, June 2. The 58-page bill features tax updates to align state law with federal standards, alongside significant updates directly affecting North Carolina banks and credit unions.

Key Takeaways for Bankers:

• Financial Exploitation Prevention: Beginning on page 44, S 595 Incorporates long-sought protections from H 754, which was drafted by NCBA and filed by legislators at our request. The provisions are applicable to transactions with or involving an adult of age 65 or older, or a disabled adult. Among other things, the provisions would allow financial institutions to place transaction holds of up to 30 business days, with an option to extend by up to an additional business days.

• Savings Bank Updates: Beginning on page 48, the bill updates key provisions of NC law for state savings banks and moves toward a greater integration of the laws for state commercial banks and state savings banks.

• Credit Union Matters: Due to strong banker advocacy, several highly aggressive proposals from the credit union industry were stripped from the bill, including provisions that would have allowed credit unions unlimited worldwide expansion and direct lending to municipalities. The credit union provisions that remain begin on page 31.

• “Banking Desert” and Membership Compromises: Legislators settled on a modified 9-mile radius rule allowing credit unions to expand into census tracts that don’t have a bank branch. Credit unions would be required to operate branches in the census tracts if seeking this expansion authority. In a related section, legislators would allow credit unions to include as members those individuals and families earning income at or below the federal poverty line. The provision includes a 25-year age floor for low-income accounts to prevent targeting college students.

• Expanded Credit Union Powers: The bill grants state-chartered credit unions expanded authorities, including indexing loan caps to net worth, lifting certain investment restrictions, and providing a fast-track 45-day notice system for adding new activities under federal parity.

What’s Next: The NCBA is monitoring the immediate impact of these changes and preparing various strategies for future legislative sessions.