Wis. Reform Bill Provision Gives Workers Claims Over Creditors
The state Assembly last week approved a credit union reform bill for the third time but this time the measure has already been passed by the Senate, which means the bill is on its way to the governor for his signature.
Lawmakers also included a controversial wage lien provision in the bill, which gives workers first claim over credit unions, banks and other secured creditors on up to $3,000 in lost wages when a company files for bankruptcy. Under the provision, each worker would be entitled to the first $3,000 in unpaid wages, after which financial institutions would be paid the full amount of their liens. After those are paid off, employees would be paid the remaining amount of any wage liens.
Wisconsin league president Brett Thompson said the credit union lobby was neutral on the provision, not wanting to appear to be opposed to a pro-worker measure and not wanting the provision to interfere with final passage of the bill.
The bill expands the field of membership rules for Wisconsin's 301 state-chartered credit unions, providing parity with federal credit unions in several areas, including allowances for multiple geographic jurisdictions, and includes provisions easing the way to serve more businesses.
"These provisions are bringing Wisconsin's statute up to date and will make the state charter here even stronger," said Thompson. The Wisconsin league had lobbied for the bill.
CUSO Powers Also Expand
The bill will also expand CUSO powers for state charters, allowing them to do what federal credit unions can do through their CUSOs and to incorporate as limited liability companies for the first time. It also increases the maximum amount credit unions may invest in a CUSO to 1.5% of assets.
It also includes provisions making it easier for state charters to branch across state lines and clarifies that credit unions are free to sell all forms of insurance products.
Passage of the bill is significant because Wisconsin, home to CUNA, is a bellwether for state-chartered credit unions as all but two of the state's credit unions have state charters.
The omnibus bill also has several provisions providing parity for state-chartered banks and S&Ls, as well as a regulatory flexibility, or Reg-Flex, measure, easing regulatory restrictions on the healthiest state-chartered banks, the same way NCUA does for the highest-rated federal credit unions.
The bill is expected to be signed into law by Gov. Jim Doyle.