Credit union leaders met with state legislators this week tovoice support for two bills that would give Washington'sstate-chartered credit unions the option to pay their board membersand expand investment options.

The Northwest Credit Union Association helped craft House Bill 1582 and Senate Bill 5302 that were reviewed at statecommittee hearings in Olympia, Wash., on Thursday. If thebills are approved and signed by the state's governor, Washingtonwill become the ninth state to allow credit unions to compensateboard members.

Georgia, Louisiana, Minnesota, Mississippi, New Hampshire, NorthDakota, Pennsylvania and Texas permit state-charted credit unionsto pay their board members, according to NASCUS and Washington'sDepartment of Financial Institutions.

In addition to giving Washington credit unions the option toprovide board members with “reasonable compensation,” both billswould give credit unions the option to compensate supervisorycommittee members.

As the proposed law is written, a credit union “may pay itsdirectors and supervisory committee members,” but there is nowording in the proposed law to require credit unions to paydirectors.

“These reforms are clearly needed and will help our businessesin a very practical way,” Christina Lethlean, president/CEO of the $1.2 billion Gesa CreditUnion in Richland, Wash., told the House Business &Financial Services Committee. “So as CEO of Washingtonstate-chartered credit union, please help me and my members and mycommunity by modernizing and improving our state (credit union)act.”

For the $11 billion, 800,000-member BECU in Seattle, theproposed legislative change will benefit the credit unionmovement.

“From BECU's standpoint, we are definitely in support of creditunions to have the option of compensating board members and forcredit unions to have that conversation with their board andmembers to see if it makes sense for them,” said Tom Berquist,BECU's marketing manager.

“I think given the complexity of board work these days withadded regulatory and fiduciary responsibilities,” Berquist said,“credit unions are going to have to attract board members withcertain skills, and we think having this (compensation) optionavailable would be very good for the credit union movement instrengthening boards.”

The House and Senate bills also would allow Washington creditunions to make investments with a “registered investment company orcollective investment fund, as long as the prospectus of thecompany or fund restricts the investment portfolio to investmentsand investment transactions that are permissible for creditunions.”

The bills also include a provision that if an investment laterbecomes impermissible because of a change in circumstances or lawor if it's determined the investment will have an adverse effect onthe safety and soundness of the credit union, the state's regulatorwould be authorized to order the credit union todivest.

Earlier versions of the Senate bill contained a provision thatwould allow credit unions to access supplemental capital. But thatprovision was removed because of opposition from the WashingtonBanking Association, the NWCUA said. The supplemental capitalprovision in the House bill also has been dropped.