State Rep. Sarah Lightner today joined the Michigan House in approving bipartisan legislation to give credit unions greater flexibility to protect their members’ savings by allowing the use of private insurance options.

For many Michigan families, credit unions are a trusted place to keep their money safe. But current law requires institutions to rely on a federal agency for baseline insurance coverage, limiting flexibility and potential benefits for account holders.

“People work hard for their savings and they want to make sure the money in their accounts is protected,” Lightner said. “This plan gives credit unions the ability to choose the insurance that works best for their members, while encouraging innovation and stronger benefits through competition.”

Current state law requires credit unions to rely on the National Credit Union Administration (NCUA), a federal agency that insures accounts up to $250,000 per member per ownership category. While the law permits private insurers to provide supplemental “excess” coverage beyond that amount, credit unions are prohibited from using private carriers to provide the initial $250,000 baseline coverage.

The plan approved by the House, House Bills 5779-5783, changes that by allowing credit unions to obtain full insurance coverage through qualified private insurers if they choose, expanding options for institutions and enhancing protections for members.

Private insurers can offer different and, in some cases, more comprehensive coverage structures than the federal model. For example, while NCUA coverage is limited to $250,000 per member per ownership category, private insurers such as American Share Insurance (ASI) can provide $250,000 in coverage per account. This distinction can lead to greater overall protection for members who maintain multiple accounts within the same ownership category.

By enabling private insurance at the baseline level, the plan also promotes competition within the marketplace — potentially improving service, expanding coverage options, and encouraging both private and federal providers to deliver stronger products.

The bills also maintain important oversight and consumer protections, ensuring that any private insurer must meet regulatory standards and be approved by the Michigan Department of Insurance and Financial Services.

House Bills 5779-5783 now advance to the Michigan Senate for further consideration.