Gov. Keating signs bill allows CUs to participate in auto brokering

OKLAHOMA CITY - The Oklahoma Credit Union League is hailing the passage of a bill that was among the collection of credit union-sponsored measures passed by the state's 47th Legislature before it adjourned on May 26 and which will allow credit unions in the state to consult with members about prices and best rates for vehicles before they purchase them from dealers. H.B. 2051 was sponsored by state Rep. Jerry Hefner (D-12). It was signed into law by Gov. Frank Keating (R) on June 6 and is effective Nov. 1. Prior to its passage, only auto brokers were allowed to offer consumers assistance or advice regarding the purchase or financing of a vehicle. Credit unions were prohibited from providing this type of service because this was considered to be in conflict with credit unions' interest to increase their own auto loan portfolios, explained Debra Morrow Ingram of the Oklahoma Credit Union League. A preliminary step to introducing H.B. 2051 was passage of S.B. 1341. Among the provisions of that bill, it raised the percentage of CU assets which can consist of certain property from 5 to 7%. It also includes a definition of "interest income" that provides that it is not considered valuable consideration for negotiation services. That bill was signed into law April 13 and carried an emergency clause making it effective immediately. Morrow said both S.B. 1341 and H.B. 2051 sailed through the state legislature. Although the auto brokers took little notice of the measures before they were signed into law, Morrow said the credit union league anticipates lawsuits to be filed by the brokers once they become aware of credit unions' involvement in the service. She expects them to charge that credit unions' participation in auto brokering constitutes valuable consideration. "Now we have S.B. 1341 in our hands and we'll just wave it at them," Morrow said.