MADISON, Wis. – Gov. Jim Doyle vetoed a bill yesterday that would have allowed Educators CU to continue operating its controversial auto dealership.
The Governor excised a provision in legislation that would have grandfathered the dealership, which state officials ruled last year violates the law the prohibiting credit unions from engaging in retail sales, except as part of their leasing programs. "This is a significant change in the scope of the services offered by these organizations, and it requires broad input and discussion," Doyle wrote in his budget message.
Educators has been buying used cars at auction and reselling them at the lot since 2002, when it was approved by the state credit union regulator. The $1.1 billion credit union sold more than 700 cars there as recently as 2007.
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 last fall to give the credit union 18 months to either sell the business or get the law changed.
One of the state lawmakers who sponsored the credit union bill said he will introduce a separate bill allowing Educators to continue operating the dealership.
