Wisconsin CU League News Release - 06/26/11
Credit Unions Disappointed Gov. Walker Failed to Veto
Conversion Policy in Budget Bill
Madison, WI - The Wisconsin Credit Union League expressed
disappointment today that Governor Scott Walker failed to use his
line-item veto to eliminate non-budgetary financial institution
chartering policy that permits direct conversion of a member-owned
credit union into a stockholder-owned bank. The policy, slipped into the
1,500 page, $66 billion budget bill by the Joint Finance Committee and
approved by the Legislature, makes it easier for Wisconsin’s 2.2
million credit union members to be stripped of their equity in the
cooperative financial institutions they own. It was added to the
budget bill at the last minute without notice to any credit union, any
credit union member, or any credit union trade association, and without
a public hearing.
“We sincerely hoped Governor Walker would have heeded the
recommendation of nearly 1,000 credit union advocates, dozens
of cooperative businesses and the credit unions’ trade
association, all of whom requested a veto,” said League President
and CEO Brett A. Thompson. “Controversial and complex financial
institution chartering policy clearly does not belong in a bill related
to the state’s finances.”
Governor Walker signed policy into law that can easily be abused by a
small group of individuals at the expense of the majority of credit
union member-owners.
“It’s discouraging the Legislature and Governor didn’t
provide an opportunity for the consumers who own their credit unions to
share their perspectives on the matters directly related to them,”
said Thompson. “With this new law, the legislature has made it
easier for a few individuals to latch onto the equity of credit union
members and turn it into even bigger profits for a few bank
shareholders.”
According to Thompson, any policy to allow for the conversion of a
state-chartered, not for profit, member-owned credit union to a
shareholder-owned, stock bank should include a transparent, neutral and
prescriptive member notification process and a meaningful voting
threshold. These are necessary to ensure the membership truly
understands the consequences of the conversion vote and all have made an
informed judgment about the future of the institution they currently
own. “Unfortunately, the policy the Governor left in the budget
bill fails on all counts,” finished Thompson.
The anti-credit union provision was included in the budget bill at the
request of the Wisconsin Bankers Association, which has made clear its
goal of eliminating not-for-profit credit unions and the competition
they represent. Last year, Wisconsin credit unions returned almost
$203 million dollars to their member-owners in the form of lower rates
on loans, higher rates paid on deposits, and fewer and lower
fees.
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