By Rose Oswald Poels
While the Wisconsin Legislature’s 2021–22 regular session has concluded, our work to oppose the expansion of credit union powers continues. On February 15, the Wisconsin Office of Credit Unions (OCU) filed a final rule to broaden which state-chartered credit unions can accept secondary capital.
Last week, WBA filed written comments with OCU expressing our concerns with this expansion and requesting specific limitations. This followed several phone conversations various WBA staff had with different individuals at DFI. Previous rules allowed only low-income designated state-chartered credit unions the authority to accept secondary capital. The revised rule would broaden this to allow nearly any credit union to issue subordinated debt, for among other things, pure asset growth purposes.
During this year’s legislative session, WBA and 87 banks strongly objected to credit union expansion legislation, AB 478/SB 451, which would have permitted, among other concerns, any credit union to issue supplemental capital. During negotiations with elected officials, the credit union industry stated that their interest in expanding a credit union’s ability to issue supplemental capital beyond only low-income designated credit unions was for the sole purpose of restoring a credit union to minimum capital levels. While the credit union legislation (which contained this broad supplemental capital provision) did not pass this session, it seems the industry is using the regulatory process to achieve this same outcome. As a result, WBA is very concerned with the expansion of powers presented by OCU’s recent rulemaking activity.
While there is no formal comment process for this type of rulemaking, I urge each of you to join WBA in emailing written comments to OCU in opposition of yet another example of credit union powers expansion in our state. I have included a template comment letter for your use in these efforts. Comments should be submitted before April 1 through email to Kim.Santos@wisconsin.gov. The rule issued by OCU will take effect on April 1 as originally published unless OCU agrees to make a change prior to this date. Thank you for your quick action on this important matter!