Credit unions in Illinois are among the most recent to feel "the blender effect" as the state, coping with a massive budget deficit, is seeking cost savings by combining four major agencies into one giant superagency.
Although the Illinois Credit Union System was officially neutral on the executive order creating the mega agency, it had been opposed to prior proposals that would have called for credit unions to be under a bank regulator.
"One of the fundamental issues has been and continues to be that we want a strong a regulator to work in partnership with the industry here," said Keith Sias, director of state governmental affairs for ICUS. "We were opposed to the consolidation because we didn't want credit union regulation to be under direct control of a bank regulator."
Prior to the proposal, the governor's office contacted ICUS to discuss a proposal that would be more amenable to credit unions.
"They came to us before they went public with their proposal and said we understand you can't support a consolidation, but you can be neutral," Sias related. "We wanted some assurances that the structure of this would keep credit unions and banks separate, we wanted assurances of the autonomy of credit unions. As a result of these informal negotiations, we are strongly neutral about this executive order.
"One of the important things going forward is that each agency will retain much of its autonomy. This is important because many of the laws are implemented by rulemaking authority, and we wanted to be sure that a credit union division will continue to make rules for credit unions," he added. "We wanted continuity and consistency of credit union regulation. Sometimes when you go through a reshuffle, you get all brand-new people who have to learn the nuances of the industry," he commented. "Michelle Latz has been an advocate for credit unions and will retain much of her authority and autonomy, and Dan Simon, who is the supervisor, has served as supervisor or assistant supervisor for years."
While Latz is now very much a known quantity for credit unions and has proven to be a CU advocate, there was a time when there was some concern about her banking ties. Prior to her regulatory position, she worked for a bank. But those concerns are long gone.
When there was talk of raiding the credit union-dedicated fund as a means of plugging the state's deficit, Latz stepped in and is credited with staving off the potential raid, Sias said.
