Gary A. Moody, president/CEO of the $890 million Credit Union One in Ferndale, Mich., agreed, stating that the league has done a tremendous job of identifying real, substantive and important issues confronting state-chartered credit unions.

“Director compensation is a potential lightning rod for opposition to the bigger bill,” Moody explained. “It has the possibility of dividing credit unions at time when a unified voice for regulatory relief and freedom to compete from all credit unions is necessary. Including this issue would clearly slow down passage of a bill, and could become a poison pill for some lawmakers who are otherwise inclined to support credit unions and pass the legislation. I fear too much political capital might be used to push through a bill with that kind of baggage attached; or worse get defeated.”

But Michael Poulos, president/CEO of the $748 million Michigan First Credit Union in Lathrup Village, Mich. disagreed with the board's decision.

He argued the purpose of the state act update should give credit unions more freedom and choice in how they operate.

“To not provide the option of paying board members is clearly inconsistent with this approach,” Poulos said. “Whether or not an individual credit union favors paying its own board members is not what's at issue. It's about promoting innovation rather than stifling it.”

When Adams and other league officials met with credit unions from around the state to discuss and gather input about the proposed credit union act changes, some large cooperatives said they would like the option of providing board compensation. However, league officials also said the vast majority of credit union leaders favored maintaining the status quo of volunteer boards.

Dennis M. Hanson, president/CEO of the $1.5 billion Dow Chemical Employees Credit Union in Midland, Mich., said he's concerned director compensation would jeopardize the industry's tax exemption and erode another part of the cooperative's differentiation business model from that of banks that do pay directors.

Read more: The issue is likely to surface again in a few years …

Poulos, however, argued numerous states already allow credit unions to pay their board members with no negative effects.

“The concept has yet to show a downside,” he said. “I believe credit unions should be given the opportunity to make the choice they want about their own governance.”

Adams acknowledged a few large credit unions are probably disappointed in the board's decision.

Nonetheless, he said the league board is sensitive to the fact that at some point in the future, perhaps in the next five to 10 years, the director compensation option will surface again and that the board will be open to considering it.

“I think at some point in the future Michigan state law will authorize that [board compensation] for state chartered credit unions,” Davis said.

Hanson said it's appropriate for credit union leaders to revisit the issue in the future, particularly if the supply of qualified board members dwindles.

“But to me, as long as we are able to find qualified volunteers, I don't see anything on the horizon that would change my mind,” he said.

Though director compensation continues to be a highly sensitive and contentious industrywide issue, 15 states allow director compensation. They include Indiana, Pennsylvania, Rhode Island, Maryland, Wisconsin, Georgia, Minnesota, Kentucky, Alabama, New Jersey, Nevada, North Dakota, Texas, Tennessee and Washington. In Nevada and Wisconsin, only officers of the board and committee members are permitted to receive compensation.

In 2013, CU Times took an in-depth look at credit unions that do pay board members, which revealed that most cooperatives pay small stipends that range from a few hundred dollars to $7,000 a year. And even in states where compensation is permitted, some credit unions do not pay directors.

However, some board members received considerably higher annual compensation.

Some state-chartered credit unions in Pennsylvania, Rhode Island, Indiana, Maryland and Wisconsin tended to pay their directors higher levels of annual compensation.

In Pennsylvania, for example, board compensation ranged from $4,000 to $65,000; in Rhode Island, from $300 to $39,000; in Indiana, from $750 to $93,000; in Maryland, from $1,000 to $29,000; and in Wisconsin, from $2,000 to $21,000.

Nevertheless, directors at some state-chartered credit unions in North Dakota, Texas, Georgia and Minnesota paid their directors less annual compensation.

In North Dakota, director pay ranged from $2,000 to $5,300; in Texas, from $90 to $12,000; in Georgia, from $100 to $9,800; and in Minnesota, from $1,000 to $12,000.