State Credit Union Department Proposes New Conversions Rule

AUSTIN, Texas - The Texas CU Department Friday voted to issue for comment proposed changes to the rules governing conversions to mutual savings banks which would allow for a public comment period before the vote of the membership. The proposed changes were precipitated by the two biggest credit union conversions ever, $1.6-billion Community CU and $1.4-billion OmniAmerican CU, neither of which allowed the members of the two credit unions giants to weigh in before votes were cast. The proposed changes would require a credit union to notify its members that a conversion is being considered prior to sending out the official disclosures and ballots, make information on the conversion available electronically and provide a mechanism for members to submit their comments on the conversion before ballots are issued. The Commission, which oversees the CU Department, is expected to vote on the proposals in June.