Georgia credit unions seek members' approval for charter conversion
Georgia’s Interstate Unlimited Federal Credit Union and Marshland FCU are planning to make the switch from federal to state charters.
These two are just the latest in a series of credit unions to roll out plans to convert to state charters, including Georgia-based United 1st, which announced in May, as well as Michigan’s CP Federal and others.
Conversions to state charters have outpaced institutions switching from state to federal charters for most of the last decade, particularly as many states have updated their credit union statutes. The coronavirus and recession could have a long-lasting impact on the industry’s chartering landscape.
Interstate Unlimited Federal Credit Union in Jesup, Ga., is set to hold a virtual meeting at the end of this month for members to approve its conversion to a state charter. An FAQ on the credit union’s website suggested the conversion would better position the $195 million-asset institution for long-term growth and enable greater options for membership growth.
The move has been in the works for several years and management met with state regulators in January to discuss the plan. The application to convert is pending approval from Georgia’s Department of Banking and Finance and the National Credit Union Administration, though the member vote must take place first.
“Because we are unsure how long social-distancing measures will be in aﬀect, conducting a virtual meeting seems to be our best option at this point in time,” the credit union said. “A virtual meeting, along with online voting, will also allow for more member participation than conducting a traditional meeting in one of our branch locations.”
Interstate earned about $709,000 during the first quarter, about 13% more than it earned during the same period last year. The credit union said the conversion process — including expenses for rebranding, examination and operating fees, tax liabilities, and attorney and consulting fees — will cost approximately $20,000.
Marshland FCU in Brunswick, Ga., is planning to convert for similar reasons.
“The credit union’s primary objective in seeking a state charter is to enhance the credit union’s potential for growth,” President and CEO Jeff Holcombe wrote in a letter to members. “The state charter would allow the credit union to extend membership eligibility to other people in our community and the surrounding area”
Holcombe added that the switch would enable Marshland to expand service into Chatham County, along with offering new products and services and potentially opening new branches.
A virtual meeting to approve the conversion is scheduled for July 21.