Community CUs Not A Jumping Off Point For Bank Conversions
Converting to a community credit union is not a jumping off point to converting to a bank charter, and the trade association representing community charters wants to make sure everyone knows it.
"We are concerned that there could be a perception by some that community charters are a stopping point along the road to conversion (to bank charter)," said Mark Selvitelli, executive director of the National Association of Community Credit Unions. NACCU is taking a close look at this issue. We take this issue seriously."
Selvitelli told The Credit Union Journal that his concerns about this potential perception is that some of the most visible and controversial of charter conversions have been community credit unions, including, of course, the credit union that bears the same name as its charter: the $1.4-billion Community CU, Plano, Texas, which has voted to take NCUA to court over the agency's refusal to approve the CU's membership vote in favor of converting to a bank charter.
As most credit unions that choose to convert cite the need to be able to raise additional capital as a primary reason for changing charters, it's not surprising that some of those credit unions have been community charters because community charters often encounter higher operating costs. Some of those costs, for example, stem from the need to step up marketing efforts, expecially a greater investment in expensive mass media.