CHATTANOOGA, Tenn.-How did a single credit union manage to push a bill through the state legislature over the objections of other CUs in the state and the state league? Persistence, according to one person.
A bill that would allow state-chartered CUs to compensate board members will become law in Tennessee effective July 1, even though the Tennessee league opposed it. But the bill had the strong support of the $490-million Southeast Financial CU in Franklin, Tenn., which is not affiliated with the league.
"We have defeated this legislation for the past four years," said Tennessee Credit Union Leauge President Fred Robinson. "We had to win every time, the opposition only had to win once."
Robinson said that his personal perspective is that Southeast Financial didn't win, but rather a series of events unfolded that happened to favor its position, including changes to committee structure, losing key committee members who supported the league's position, while well-respected sponsors of the bill within both houses of the legislature signed on. The state regulator also made comments during testimony saying businesses-and not government-should make their own decisions, which he said "may have been the key factor in the overall support."
The league CEO added that many lawmakers viewed the bill as permissive legislation, as credit unions that did not want to compensate are not required to do so. The law also only impacts state-chartered credit unions.
"We had many supporters for our position, but after counting the votes we could not guarantee enough votes for an outcome that was favorable to our position," said Robinson. Seeing that the bill would not be able to be killed in subcommittee, Robinson said the league seized on what may have been its only chance to amend the language.
"The (league's) board of directors decided to amend the language rather than possibly lose the vote in subcommittee and the bill head to full committee and floor vote with the original unacceptable language," he explained.
