RACINE, Wis. – The state’s auto dealers lobby, which succeeded in forcing Educators CU to divest its auto sales business, filed suit last month challenging the 18 months state regulators gave the credit union to wind down its business.
The suit, filed by the Wisconsin Automobile and Truck Dealers Association, asks for a court judgment that the Office of Credit Unions did not have the authority to offer the $900 million credit union the deal it did. The order gave Educators several options, including getting the state law changed by the April, 2010 divestiture date; or getting the state regulation changed to allow for the auto sales.
The suit is the latest action by the auto dealers challenging the state chartered credit union’s authority to sell used cars. Earlier this year, the state regulator ruled that a credit union’s charter allows vehicle leasing but not sales and ordered the credit union to close the operation. After an appeal, the regulator gave the credit union 18 months to comply with the order.
The credit union created a retail auto dealership in 2002 to provide car-buying resources and used car sales to its own members and consumers.
