PEWAUKEE and MADISON, Wis. - Just two months ago, they were sitting across from one another exchanging barbs. Now, in a historic and unprecedented move, the Wisconsin Credit Union League and Wisconsin Bankers Association have reached an agreement that will combine the league's Credit Union Consumer Choice Bill-S.B. 274-with the WBA's Universal Bank Bill-A.B. 563-that ensures passage of the resulting omnibus financial reform package before the state legislature adjourns. Representatives of the WCUL and WBA negotiated the agreement at the request of the Department of Financial Institutions Secretary Jack Kundert and Office of Credit Unions Director Ginger Larson. The Community Bankers of Wisconsin was also instrumental in the agreement being reached, said the Department of Financial Institutions. Ron Halvorsen, president, WCUL called the deal "historic" and noted that if the financial reform bill is approved, credit unions will benefit from putting into law current Office of Credit Unions' interpretations of credit union powers. "The substitute amendment is a good bill for the financial services industry and consumers of Wisconsin," Halvorsen told Credit Union Times. "That was our aim from day one when we introduced the original credit union bill. "It's not often banks and credit unions agree on anything," he remarked. "But in our meetings, we all came to realize there is a lot more common ground than anyone first imagined. That opened the door to drafting the omnibus package." Basically, the agreement modifies and streamlines some portions of S.B. 274. The Universal Bank Bill language-a localized version of the federal Gramm-Leach-Bliley Financial Modernization Act-will be added to the modified credit union bill. S.B. 274 was introduced in December 1999 by Sen. John Erpenbach (D-Middleton). An identical bill-A.B. 573-was introduced in the state House by Rep. Frank Lasee. It passed the Senate on Feb. 8 and was sent to the Assembly. A.B. 563 passed the Assembly on Feb. 9 and was sent to the Senate. Both bills remain pending. According to the DFI, Rep. Suzanne Jeskewitz (R-Menomonee Falls), chair of the Assembly Financial Institutions Committee predicts her 15-member panel will approve the compromise package. From there, the omnibus financial reform bill will go to the floor of the Assembly. Jeskewitz says if S.B. 274 is approved by the Assembly, it will go back to the Senate for concurrence. Among the provisions of the compromise substitute amendment to S.B. 274: * It restores the original definition of a credit union, but would retain the new cross-references to special definitions in sections 186.41 and 186.45 (the Senate Committee on Privacy, Electronic Commerce and Financial Institutions adopted this same language when they considered the original credit union bill.) * The original credit union bill would have given the Office of Credit Unions the authority to expand the field-of-membership for community charter credit unions to include non-continuous communities or counties. The substitute amendment restores the term "well defined" and requires that community charter fields-of-membership generally remain within contiguous territories. * The original bill modified the purposes and powers of a CUSO. The current statutory language restricts a CUSO to providing services primarily to credit unions and their members. The proposed changes in original S.B. 274 would have allowed CUSOs to invest in any company that does business with the CUSO in their ordinary course of business. The substitute amendment removes the new language, restoring restrictions on the purpose and function of CUSOs. The substitute also removes several proposed new powers for CUSOs. The substitute amendment retains changes to the business structure of a CUSO to reflect changes in business structure law. * The original credit union bill would have expanded the ability of a credit union to purchase certain assets. Those powers would be removed by the substitute amendment. * The original bill would have replaced the definition of `vicinal industries' with modified language describing employment-based eligibility for membership in a CU. The substitute removes the proposed changes. * The statutory definition of a family member is removed by both the original CU bill and the substitute. However, the original bill would have allowed a CU to establish that definition by policy. The substitute would require the credit union to establish all requirements of membership in their bylaws and the Office of Credit Unions must approve all bylaws. Other negotiated provisions of the substitute amendment include those concerning organization membership, Department of Agriculture, Trade and Consumer Protection (DATCP) exemption, privacy, and the Community Reinvestment Act (CRA) As a final agreement provision, the WCUL and the WBA have agreed to withhold for a two year period any new legislative proposals relating to the provisions removed from the credit union bill and CRA. Halvorsen is not sensitive to the substitute bill being labeled "a compromise." Even though there are provisions in the original bill that are not included in the substitute amendment, "everything in the substitute amendment is still an improvement over our existing credit union law," he said. Commenting on the compromise agreement between the WCUL and WBA, Kurt Bauer, lobbyist for the WBA said, "Everyone wins. The credit union league took out portions of the original bill we had problems with and left in sections they argued were necessary to solve particular problems. "Credit unions and banks represent a powerful constituency in Wisconsin," Bauer added. "This is an opportunity for the state lawmakers to do something for their constituents." At press time, Halvorsen said the WCUL had gotten indications that the state Assembly would approve the bill and he had every reason to believe the "Senate leadership will see the substitute amendment as a total package that's good for Wisconsin consumers." -
ekingoff@cutimes.com
