SALEM, Ore.—Add Oregon to states where CU directors may someday be paid for their services.
A bill (SB 582) has been introduced in Oregon to permit state-chartered credit unions to pay directors and supervisory committee members reasonable compensation for their services.
A great deal of debate exists over the practice of compensating the board, with some CUs saying it’s necessary to recruit and retain qualified directors, while others say a volunteer board emphasizes the difference between credit unions and banks.
The Oregon bill’s summary explains the change would help “credit unions attract and retain qualified directors at a time when numerous circumstances make that increasingly difficult.”
The legislation would also remove the requirement to open a share account as a condition of membership.
In 2013, Washington and Tennessee passed bills that allow state-chartered credit unions in those states to pay their directors. Additionally, North Dakota, Alabama, Georgia, Minnesota, Rhode Island, Pennsylvania, Maryland, Wisconsin, Indiana, Kentucky, New Jersey and Nevada permit state-chartered credit unions to compensate board members. Texas allows state-chartered credit unions to pay directors for attending board meetings. Mississippi, Montana, Idaho, Arkansas, Colorado and Vermont allow compensation for just the board treasurer.
Analysts have predicted that more states will allow CU boards to be compensated. But the question is how many CUs will do so. In the states that allow board compensation, only a small number of credit unions currently choose to pay their directors.
Proponents for paying the board argue that compensation is necessary to recruit and retain talented directors to oversee credit unions that are growing in size and complexity, which is also demanding more of board members’ time.