Seeking statewide reach, Michigan’s CP Federal mulls charter change

CP Federal Credit Union in Jackson, Mich. has filed an application to convert from a federal charter to a state charter, citing membership eligibility restrictions at the federal level.

“Our ability to expand our membership eligibility is restricted under federal law,” the credit union said in a recent newsletter. “As we continue to meet the needs in the Jackson community, open new branches and move into new markets, we believe that the federal field of membership rules impair our ability to meet the needs in their entirety.”

Late last year, state regulators approved Michigan Legacy CU for a similar expansion that granted it a statewide FOM.

The $468 million-asset CP Federal said while expansion is not needed immediately, the ability to broaden its field of membership is “a proactive move to help ensure the long-term viability of our credit union.” Converting to a state charter will allow CP Federal to adopt a statewide FOM, serving anyone who lives, works, worships or attends school in the Great Lakes State.

A member vote is expected to be held sometime before the end of summer to approve the charter conversion, which state regulators OK'd last month. The credit union specified that even as a state charter it would retain federal share insurance.

Nearly four years ago, former Michigan Gov. Rick Snyder signed an update to the state’s credit union act into law in order to allow additional flexibilities and growth opportunities for Michigan CUs.

As reported, the pace of growth continues to slow at credit unions across the state, though many shops continue to be involved in mergers or other expansion plays. Earlier this year, Dort Financial in Grand Blanc, Mich., announced its plans to convert from a federal credit union to a state charter as part of a wider rebranding effort.

CP Federal earned just over $5 million in net income last year, a gain of more than 7% compared to year-end 2018. As part of those earnings, it returned more than $725,000 to members. The credit union’s first-quarter 2020 call report data was not yet available at the time this story was published.