Connecticut League Applauds Passage of Credit Union Modernization Legislation

New Law Increases Flexibility for Credit Unions to Invest in Community Impact and Inclusive Growth

Rocky Hill, CT – In a significant legislative win for Connecticut’s credit unions, Governor Ned Lamont has signed into law Public Act 25-37, which ushers in a broad-spectrum modernization of the state’s credit union statutes. Spearheaded by the Credit Union League of Connecticut (CULCT), this new law 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. 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,” said Bruce Adams, President and CEO of CULCT. “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.”

Key Provisions of Public Act 25-37
Public Act 25-37 modernizes certain elements of the Connecticut General Statutes governing credit unions and aligns them more closely with today’s operational realities and federal standards. Key provisions include:

• Support for Underserved Communities: Credit unions designated as Community Development Financial Institutions (CDFIs) 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.

These changes position Connecticut as a leader in credit union regulatory modernization.

A Collaborative Effort with Broad Support
CULCT worked in close partnership with state lawmakers, credit union leaders, and financial regulators to ensure this legislative effort would enhance operational clarity while upholding the principles of safety and soundness. The bill passed with strong bipartisan support.

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

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

“This win isn’t just about deregulation—it’s about smart regulation,” Adams added. “We look forward to continuing our work to modernize state statutes so that credit unions can operate with greater predictability and efficiency, while staying true to their people-first mission.”


About Credit Union League of Connecticut:
The Credit Union League of Connecticut serves, advocates for, and advances the interests of Connecticut credit unions to support their growth and maximize the positive impact credit unions have on their members, communities, employees, and on all their relationships. For nearly 100 years, the League has helped its member-credit unions position for sustainable success and growth through a variety of offerings including government relations, regulatory compliance, executive education, and vendor partnerships. To learn more visit www.culct.coop.