Hearing Video on Paying Directors

Legislation has been introduced in Tennessee and Washington that would permit state chartered credit unions to pay their directors.

Paying directors is a controversial issue within the credit union industry. Some within the credit union industry argue that credit unions are becoming increasingly complex and need to be able to compensate directors to attract qualified people to serve on the board. However, others argue that a volunteer board sets credit unions apart from banks.

Below is the February 19th video of a hearing in the Tennessee Senate Commerce and Labor Committee (about 31 minutes in length).

The hearing had several witnesses including the former president of Southeast Financial Credit Union, who spoke in favor of the bill. When asked why not become a bank if he wanted to pay his directors, he spoke about the onerous burden that NCUA imposes on credit unions seeking to convert to a bank charter.