MADISON, Wis. — Educators CU may soon learn that it will not have to divest its used-car-sales business.
That's according to the Wisconsin CU League, which is optimistic that a provision in the state budget will reverse a ruling by the Office of Credit Unions that required the Racine, Wis.-based ECU to cease selling cars on April 30, 2010. The decision was based on a state statute that explains activities undertaken by state-chartered credit unions must be "routine daily operations of credit unions" (CU Journal, Nov. 10, 2008).
"During its work on the state budget, the Joint Finance Committee inserted an amendment that would basically grandfather in Educators' operation," said Tom Liebe, VP of government affairs for the league, who said WCUL supported efforts to have the provision added to the budget. "According to legislators, they really did not like the idea of a company making a substantial investment in the community and having the rules changed in the middle of the game. Our biannual state budget is must-pass legislation. So the legislators have to act on it. From what we hear, the entire process could be wrapped up in the next five to six weeks."
If the $1-billion Educators is allowed to continue its car-sales operations through its CUSO, Liebe believes it is due to the CU's diligence in following the direction of the Office of CUs after last year's ruling, and from community support. "I think there are many community members who had a great experience working with Educators' CUSO, and they were the best advocates for keeping the operations open."
The ruling requiring divestiture of the car sales operation was handed down after the Wisconsin Automobile & Truck Dealers Association complained to the state's Office of CUs.
"Clearly the car dealers do not like the competition," offered Liebe. "Educators has a product that they have introduced in the market that is ultra-competitive and provides a service to the community."
Educators Credit Union declined to comment.
