FEDERAL WAY, Wash.-The Northwest Credit Union Association is behind legislation that would allow state-chartered credit unions in Washington state to pay their boards of directors.
Lynn Heider, VP, public relations and communications for the NWCUA, told Credit Union Journal the legislation is part of a greater effort by the trade group to "modernize" the Credit Union Act in the Evergreen State.
"For several years we have been looking to improve the operating environment for credit unions to help them serve their members better," she said. "Since at least 2009 our committees have studied the director issue. They have held many meetings and have done an extensive review of the Credit Union Act."
Based on "extensive" studies, Heider said the NWCUA determined the best course of action would be to allow some credit unions to pay directors, which the league feels will help CUs attract younger, more diverse boards.
Recruit Younger Members?
"We think it will help recruit young members who are asked to do so much these days," she explained. "With new regulations board members have to be aware of a number of ratios to be able to advise the senior leadership of the credit union. It is a big commitment to be on the board. We want to be able to give credit unions the flexibility if they choose to. The bill would provide the state regulator the ability to draw up the rule."
On Feb. 7 there were more than 100 advocates for Credit Union Day in the capitol in Olympia, Wash., which happened to be the day the legislature held a hearing on the bill. Heider said the NWCUA felt good about the opportunity to be heard on the issue, but noted the league did not know the result as of yet. "It takes a while to work its way through the system," she noted.
The original version of the legislation introduced in the Washington State Senate included a provision to allow CUs to raise supplemental capital. Heider said the supplemental capital language was removed from the Senate bill so it aligns with the accompanying House bill. "This allows this modernization bill to proceed through the House more efficiently," she said. "The supplemental capital portion is off the table but it can always be revisited after federal legislation passes."
The NWCUA also has a committee in Oregon that has performed similar studies regarding director pay and numerous other issues, Heider said. She noted the director compensation issue is not part of any bill in Oregon this time, but said Oregon CUs are planning to propose improvements to the Credit Union Act in the future.
