Conversion Adocates Make TheirCase

ROSSLYN, Va. - (05/09/06) -- Two advocates for the option toconvert from a credit union charter to a mutual savings bankcharter defended that option amid some sharply pointed questionsfrom credit unions attending a debate hosted by MACUMA here Mondaynight. Marvin Umholtz, the membership director for the Coalitionfor Credit Union Charter Options, and attorney Robert Freedman, whohas been involved in a number of credit union charter conversions,strongly advocated the right of credit unions to convert andrepeatedly stated the motivation is not “insiderenrichment” and that a mutual savings bank charter is notright for 95% of credit unions. Freedman said he does not oppose“some type of distribution” of net worth to all memberswhen an credit union converts charters, but does oppose any type ofrequirement that a certain period of time pass before anyoneassociated with the credit union can cash in on the issuance ofstock. Both also reiterated the reason more information is notdisclosed about the conversions is that NCUA “makes it verydifficult.” Umholtz said he believes NCUA’s actions inTexas, where the agency challenged the way paper was folded inmaterials provided to members of Community CU and OmniAmerican CU,“has done more damage” in Congress “than anythingelse you could do. You need too many other things than this. Thecredit union industry is becoming laughable because people thinkyou’re nuts.” The session was moderated by CU JournalPublisher Frank J. Diekmann.