ONTARIO, Calif. and SAN JOSE, Calif.-Technology CU has applied to NCUA to convert to a mutual savings bank, which, at $1.5 billion, would be the biggest ever credit union conversion to bank.
The credit union said it published a notice informing its members of its plans to shed its credit union charter. Credit union officials said a bank charter will allow them to serve customers outside the credit union's current six-county field of membership and enable it to more easily raise capital.
California Credit Union League CEO Diana Dykstra responded in a statement that the "League understands that, under current laws and regulations, credit unions operate under more restrictions than do mutual savings banks or commercial banks," but that "Technology is a large, well-capitalized credit union, and these restrictions do not appear to be impeding its ability to serve its members."
Asked if there is any further action the CCUL might take in response, a spokesperson said the league's role is "to ensure that credit unions and their members are provided complete and accurate information about all considerations regarding a charter conversion."
"We recognize that credit unions are facing pressures that result from a devastating economic recession," the spokesperson said, noting the league has been lobbying for relief from a number of regulatory restrictions.
"Despite these challenges, the credit union charter remains the best choice," the statement continued. "A credit union's not-for-profit, cooperative structure and focus on consumers allows credit unions to offer a far better economic return than for-profit financial institutions that concentrate on return of profits to stock holders."
In a statement on its website, Technology Credit Union states it is seeking to change charters to "significantly expand its commercial lending business," which will allow it to "improve our earnings."
