Regulator Says New Legislation Will Not Endanger CU Members' Free Speech
Washington State's credit union regulator disputes suggestions that legislation her department supports would endanger the rights of credit union members to criticize their credit unions.
An identical pair of bills, one in the state House and the other in the Senate, would modify DFI's examination and supervision of state chartered credit unions. Section 15 of the proposed legislation includes the clause: "It is unlawful for any person to knowingly make or disseminate a false report or other misrepresentation about the financial condition of any credit union."
People for Democratic Financial Institutions, a group made up in part of members and former members of the Vancouver, Wash. based Community Credit Union have argued this clause would have a "chilling effect" on credit union members' ability to criticize their credit unions.
But Linda Jekel, the director of the Division of Credit Unions for Washington State said the measure contains several protections. She pointed out that the word "knowingly" means that someone would have had to continue to make statements about a credit union's financial condition after being told what the institution's financial condition truly was. Second, she pointed out that the language both penalizes anyone from outside the credit union from making misrepresentations, as well as the credit union leadership from making misrepresentation that are too rosy.
"The language cuts both ways," she contended. "What we are really going after are rumors being spread that would cause runs [on the credit unions]," she said.