NCUA Halts New Member Recruitment In UtahCU Converts

Register now

SALT LAKE CITY - (12/20/04) -- NCUA directed three Utah creditunions last week to virtually cease taking new members because of afederal court ruling invalidating their community charters. Thefederal regulator also directed Tooele FCU to revert to itsprevious one-county charter because the controversial six-countycharter it and the three other credit unions were granted was putin limbo by the court ruling. NCUA General Counsel Robert Fennersaid Friday the agency is working with the three credit unions:America First FCU, Goldenwest FCU and Utah Community FCU, to createan interim field of membership so they can continue signing newmembers, but those credit unions were directed by NCUA toimmediately halt taking any new customers that aren't familymembers. "We are working with them to put an FOM in place," Fennertold The Credit Union Journal. He said approval of an interim FOMfor the three credit unions should be a 'matter of days,' insteadof a 'matter of weeks or months.' NCUA granted the three creditunions the controversial community charters in the spring of 2003,just days after granting it for Tooele FCU while the state'slegislature was debating taxing large credit unions. This allowedthe three credit unions' to escape the tax trap by converting tothe tax-exempt shield of the federal charter.

For reprint and licensing requests for this article, click here.
MORE FROM AMERICAN BANKER