ROCKY HILL, Conn.–In what the Credit Union League of Connecticut is calling a “significant legislative win” for the state’s credit unions, Gov. Ned Lamont has signed into law Public Act 25-37, which modernizes numerous state CU statutes.

The CULCT said is “spearheaded” the new law, which is said “brings meaningful regulatory relief and operational flexibility to the state’s credit unions, empowering them to better serve members and communities across Connecticut.” 

“On behalf of the members who advocated for these changes, we are pleased to provide this win for all Connecticut credit unions,” CULCT President and CEO Bruce Adams said in a statement. “We are listening to our credit unions who consistently ask for a more level playing field with their federally chartered counterparts and advocating for a more efficient, mission-aligned statutory framework. This legislation continues our relentless work to help credit unions compete fairly and grow responsibly, while meeting the evolving needs of member and their communities.”

The Key Provisions

According to the CULCT, the key provisions of Public Act 25-37 modernize certain elements of the Connecticut General Statutes governing credit unions and aligns them more closely with “today’s operational realities and federal standards.”

Those key provisions include:

• Support for Underserved Communities: Credit unions designated as Community Development Financial Institutions (CDFIs), which may now accept non-member deposits up to capped thresholds based on total assets, enabling greater access to capital for financial inclusion work.
• Preferential Loan Terms for Insiders and Employees: The act allows credit unions to extend preferential credit terms (e.g. “employee discounts”) to insiders, employees, and board members if done under a formal policy that prevents financial loss and eliminates conflicts of interest.
• Expanded Loan Exemptions: Certain loans are newly exempted from the definition of “member business loans,” giving credit unions more freedom to engage in safe commercial lending.
• Streamlined Charitable Giving: Management may now authorize a certain amount of charitable contributions without board approval which relieves burden on volunteer boards of directors and allows management to be more agile when responding to community needs.
• Net Worth Clarification: The law revises the definition of “capital” and “net worth,” excluding regular reserves from certain calculations and better reflecting real financial health under modern accounting standards.

Grateful for Collaboration 

“We are grateful to our legislative champions and the Department of Banking for their partnership,” Adams said in a statement. “This is what successful collaboration looks like when we all do our part to help Connecticut families, workers, and small businesses thrive.”

With the implementation date set for July 1, 2025, the CULCT said credit unions across the state are preparing to update internal policies and leverage the law’s new flexibilities, and that it will provide member credit unions with guidance and compliance resources to support the transition.