RACINE, Wis.-Educators said it will end a long fight with the state's auto dealers and sell a used car lot it operates.
Under the deal, the $1.2-billion CU will sell the dealership to the current manager, who will rent the facility from the CU and keep the whole staff.
The sale, which was prompted by an ongoing disagreement with the Wisconsin Automobile and Truck Dealers Association, was required by state regulators who directed the credit union to either get state lawmakers to pass legislation allowing a credit union to own a car dealership or to sell it by May 1. Lawmakers had gotten a clause included in the state budget last year to grandfather the credit union's ownership of the dealership, but it was vetoed by the governor.
Educators has been buying used cars at auction and reselling them at the lot since 2002, when it was approved by the state regulator.
But a complaint lodged by a local car dealer led the state Office of CUs to ban the dealership, ruling the credit union charter allows vehicle leasing but not sales. The agency ordered Educators to cease selling cars, but agreed to give the CU 18 months to either sell the business or get the law changed. The order found that Educators' used auto sales were impermissible because they were not "routine daily operations of credit unions." The order does not prevent the CU from selling repossessed vehicles or cars coming off lease from members.
