Congress to Debate CU Conversions

WASHINGTON –Lawmakers will grappled with the growing numbers and size of credit unions converting to mutual savings bank as part of the debate over a new regulatory relief bill for credit unions, according to one key House member who will be involved in the debate. Congressman Paul Kanjorski, who co-sponsored HR 1151, the CU Membership Access Act, a decade ago, said he plans to include a provision in his new bill, the CU Regulatory Improvements Act, or CURIA, that will set a minimum voting requirement for the controversial charter switch. “If I had my choice I set it at 50% (of the members),” Kanjorski told The Credit Union Journal. But the Pennsylvania Democrat acknowledged that such a high voting threshold is not likely to pass and a much smaller one, like 20%, is more likely. Kanjorski said he will not pursue a proposal he discussed earlier, recapturing the taxes from a credit union that eventually sheds its tax-exempt status, but he worried about the financial benefits accruing to a handful of insiders who eventually convert the mutual savings bank to publicly owned bank. “We can’t bar them from doing it (converting),” he said. “But we shouldn’t allow it to become profitable.”