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Wis. provision in budget bill would make CU conversions easier
PEWAUKEE, Wis. (5/16/11)--The Wisconsin Legislature’s Joint Finance Committee Thursday voted to include language in the state budget bill that would make it easier for Wisconsin’s 2.2 million credit union members to be stripped of their equity in the cooperative financial institutions they own--by permitting direct conversion from a credit union to a bank charter, according to the Wisconsin Credit Union League. The vote on the budget amendment came after the provision was inserted into the bill without any public hearings, without any notice to credit unions, and without seeking any input from credit unions or their members, the Wisconsin league said. The conversion of any financial institution from one type of charter to another is a complex matter that should require thoughtful consideration, appropriate information-sharing with stakeholders, and sufficient protections for the financial institution’s owners, the league said. A Wisconsin credit union whose management or board of directors wishes to convert to a bank already has two avenues by which it can bring its plan to its member-owners for their vote. The budget bill amendment for a new third avenue, slipped in surreptitiously, is unnecessary and bypasses all the considerations and owner protections provided by the two currently available avenues, the league said. “It’s no surprise that this anti-consumer provision was included at the request of the Wisconsin Bankers Association (WBA),” said Brett Thompson, president/CEO of the Wisconsin league. “They have made clear their intent to harm or eliminate not-for-profit credit unions and have no business determining public policy on behalf of Wisconsin credit union members.” The WBA represents dozens of bailed out for-profit banks that still have more than a 90% market share for banking services in the state. “We would certainly support a legislative discussion regarding the conversion issue, but this is a major policy item that stands to negatively affect Wisconsin credit union members and should not be part of a state budget bill,” said Thompson. “If the WBA thinks it’s good policy to make it easier for a credit union to become a bank, then it should have a stand- alone bill introduced, permitting all interested and affected parties a chance to speak up and be heard in an open discussion. “Attaching a non-budgetary amendment that affects the property and rights and interests of so many Wisconsin citizens to the budget bill--at the very last moment and under cover of darkness--is not the Wisconsin way,” Thompson added. Last year alone, credit unions returned almost $203 million dollars to their member-owners in Wisconsin--in the form of lower rates on loans, higher rates paid on deposits, and fewer and lower fees. Wisconsin’s credit unions are calling on Gov. Scott Walker to commit to vetoing the conversion provision when the budget bill gets to his desk.


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