NCUA Denies Another CU Conversion Bid

ALEXANDRIA, Va. -- NCUA last week rejected an application from Sunshine State FCU to convert to a mutual savings bank, even though the $130 million credit union received clearance, as well as member approval for the charter switch more than two years ago. The credit union regulator notified representatives of the would-be savings bank of several shortcomings in its packet of member disclosures and ballots, including a need for greater discussion of the elimination of the credit union's tax exemption; the switch to deposit insurance under the FDIC; explanation of the affect of the conversion of deposit and loan rates; and where members may obtain a full copy of the conversion application. A credit union representative said they expect to address the issues and resubmit the materials to NCUA. Sunshine State FCU received all of the necessary approvals to convert two years ago, by members, NCUA and thrift regulators, but a change in top management nullified the prior application, requiring them to go through the whole process again.