Premier Amendment Puts Squeeze On Conversions
The board of directors at Premier Federal Credit Union is asking NCUA to approve an amendment to its bylaws that would require a majority of the membership to vote on converting the institution to a non-credit union charter.
Premier CEO Willie Combs suggested the bylaw change to the nine-person board in response to the hotly-debated charter conversion issue. "I'm really proud of the board and the management team," Combs said, following the unanimous vote favoring the change. "When a credit union explores taking such an extraordinary step-one that changes the fundamental nature of the institution and its relationship to the people it serves-it argues for a thoughtful process."
Currently, the Premier bylaws are silent on the charter conversion issue, deferring to federal statutes. Combs related to the board statistics showing previous credit union conversions to mutual savings banks.
"They all end up sooner-or-later becoming for-profit banks," Combs said. Told this fact, one board member immediately responded by saying, "That's not what we're about."
The proposed change to the bylaws would require a majority of the members cast ballots on converting to anything other than a credit union charter.
The amendment allows for the vote to take place at the credit union's annual meeting, by calling a special meeting, or by written ballot.
Combs is serving on a conversion task force for the NC Credit Union League. The task force is getting feedback from credit unions across the state in an effort to gauge what, if anything, the league should do should a Tar Heel credit union announce its intention to convert to a mutual thrift.
"One of the duties of a sitting board of directors is to ensure the continued survival of their credit union," said Local Government Federal Credit Union CEO Maurice Smith, who heads up the league's conversion task force. "Premier's bylaw amendment affirms its board's commitment to this obligation."