“Given their income tax immunity and desire to be viewed the same as other not-for-profit organizations, it is troublesome that credit unions are seeking compensation for their directors and committee members, a practice much more common in tax paying, for profit businesses,” he said. “As credit unions seek to look and act like banks, the legislature at a minimum should be asking credit unions to demonstrate the public benefit that they are providing in exchange for their state income tax exemption.”

Harold B. Scroggins III, a lawyer who represents the Northwest Credit Union Association, argued that compensation would help credit unions attract and retain “qualified, interested and engaged” board members and supervisory committee members to oversee the credit union's operations, which has become an increasingly time-consuming, complex and difficult task.

“Permitting compensation for directors does not alter the cooperative nature or characteristics of the credit union,” he said. “Directors will still be elected by members who each have an equal vote. Directors will have the same ongoing duty to oversee management of the credit union for the benefit of all members, as is currently the case.”

Unlike the Northwest Credit Union Association, however, the Michigan Credit Union League in May dropped its support of a controversial amendment under consideration by its state legislature that would have given state-chartered cooperatives an option to pay board members.

Credit union leaders said the league's board of directors rejected the amendment because it wasn't the right time. Nonetheless, they also acknowledged it might be only a matter of time – perhaps over the next five to 10 years – before state-chartered credit unions will have the option to compensate directors.

Although Michigan's decision shows that director compensation remains a highly controversial issue, 15 states allow some form of director compensation. They include Indiana, Pennsylvania, Rhode Island, Maryland, Wisconsin, Georgia, Minnesota, Kentucky, Alabama, New Jersey, Nevada, North Dakota, Texas, Tennessee and Washington.

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, credit unions do not pay directors.

However, 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 lower levels of annual compensation.

For example, 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.