At least three more state credit unions are in the process of converting to federal charters, as the banker-driven flight from the state charter continues in the Beehive State, according to a new report by the Department of Financial Institutions obtained by The Credit Union Journal.
The report, provided to the legislative task force studying the proposed tax on state-chartered credit unions, shows a massive switch in chartering activity since 2002, when the banks began their latest bid to tax credit unions.
Since that time 11 state charters have converted-including the six largest-and three more are pending: Granite CU ($190 million); Blues Plus CU ($6 million) and Horizon CU ($70 million).
During this two-year charter flight the share of total credit union assets in Utah held by state charters has gone form 86% to just 22%.
The credit unions have fled the state charter because of the intensifying battle with the bankers and the greater flexibility of the federal charter, the DFI reported.
The mass conversions have also helped drain state coffers of as much as $4 million a year through the state sales tax federal charters are now exempt from and the supervisory fees those credit unions had paid to help support the DFI's annual operations.
