NEWS: The Wisconsin Office of Credit Unions announced today that it will not enforce General Letter CU 4-18 for now, except in cases where a loan is made to a single non-member.
As you know, the OCU issued the letter in September, requiring that co-borrowers on credit union loans must be members. The League disagrees with that requirement, and we sent a memo to the OCU last week to spell out our legal analysis.
In a memo today from OCU Director Kim Santos to the state’s Credit Union Review Board, she stated that her office will not enforce CU 4-18 during the transition to the newly elected administration of Governor-elect Tony Evers and that in the meantime she will “work towards a resolution that clarifies the issue under the parameters of the law.”
Director Santos’ memo states:
Effective as of the date of this memo, CU Letter 4-18 will be held in abeyance until the change in administration is complete, the OCU can review the League’s memo more thoroughly and further discussions can be held with all interested parties.
OCU examiners have been instructed to not enforce CU Letter 4-18 except in situations in which a loan has been made to one party, and that one party is not a credit union member. For example, a loan to a single-party non-member borrower. In those situations, examiners will discuss circumstances of the loan with credit union staff and management. They will also work with their supervisor to determine if there is a violation and what the course of action will be.
The League will alert you about further developments on this issue and work with OCU toward resolving it, which will likely require rulemaking or a statutory amendment.