A Michigan Republican is looking to drum up foot traffic at community banks while shortening wait times at the Department of Motor Vehicles.
State Rep. Matthew Maddock introduced a House bill that would let drivers renew their licenses at banks and credit unions. For security's sake, first-time licenses and new registrations would still need to be done through the government.
But in shifting some of the burden away from the secretary of state offices that typically perform those tasks, banks could save the state $150 million in wait times and lost productivity, Maddock said in a Facebook post.
"It's not unimaginable to wait two to four hours in a DMV line these days, which is completely unacceptable in my opinion since it's a mandated government obligation," Maddock told Banking Dive. "There are 120 regional offices in Michigan and about 3,000 banks, so this should alleviate some of that congestion."
The bill, which has 21 co-sponsors and has been referred to the House Committee on Transportation, would require participating financial institutions to have a bond or errors and omissions insurance "in an amount that the secretary of state prescribes to cover the safe handling of money under this act."
Collaboration between financial institutions and the DMV makes logistical sense. Both require similar points of identification and a crossover of personal data. Banks and the DMV have joined efforts recently to prevent identity theft, the Chicago Business Journal reported.
This isn't the first time credit unions have been tapped for DMV duty, but it may be the first statewide effort.
Nutmeg State Financial Credit Union in Connecticut offers a similar program, which it calls DMV Express. Nutmeg, which has 10 branches in 10 cities across the state, opened its first shared-space DMV Express location in Milford in summer 2018, followed by another in North Haven soon after.
Nutmeg created a state government proposal to become a replacement provider when AAA stopped offering license renewals in southern Connecticut. DMV Express offers renewal, replacement, name change and address change services to everyone with a Connecticut license or ID.
“While offering additional services like the DMV Express is certainly beneficial to consumers, it's also a major strategy point for us," John Holt, Nutmeg's president and CEO told Banking Dive. "Credit unions thrive on staying in touch with their communities, and by taking on partnerships like ours with the DMV, we can continue to have a presence and remain relevant."
The Milford branch of Nutmeg has gained 25% of its new credit union members as a result of the DMV Express program, which has also reportedly reduced DMV service line wait times to an average of 10 minutes. Because it provides services to non-members of the credit union, DMV Express has exposed Nutmeg to new consumer demographics.
"There are just over 90,000 Connecticut residents who belong to a credit union. That number will only continue to grow as financial institutions evolve with new partnerships and upgraded partnerships," Holt said. "Retail partnerships like ours are extremely important in terms of bringing in foot traffic and new consumer groups to the credit union."
About half of Michigan's 9.9 million people belong to a credit union, American Banker reported.
"I would think credit unions would be the first industry to realize the value of this because it can help them get new customers in their doors," Maddock said.
The Michigan Credit Union League declined to comment.
Michigan launched a similar pilot program with four to six banks, the results of which are being formalized, said Maddock, adding that he expects his bill to have bipartisan support, but that it wouldn't move forward until next year.
“This was the result of a system that’s not working right now,” he said.
