Texas League Board Reiterates Position, Outlines Steps Taken On Conversions
With two billion-dollar-plus credit unions in its state seeking to convert to savings banks, the Texas League's board has issued a statement saying it believes the position adopted by the league is proving to be the right one. The statement of support follows a meeting by the TCUL's Task Force on Conversions, which met June 1 to review the League's stance, given all "the conversion-related developments since the league board adopted a position in March," the league said in a statement.
The statement further quoted Task Force Chairman Gary Tuma, president of Smart Financial CU in Houston, as saying, "In the months since Community CU (Plano) and OmniAmerican CU (Fort Worth) announced their intentions to convert to mutual savings banks, the topic of conversions has dominated the national dialogue in the credit union movement. Opinions about how to address the issue have been anything but unanimous, with some credit union leaders calling for the league to launch a public assault on the conversion efforts and others calling for the league to let credit unions do what they want."
TCUL Chairman Gary Davis said that given all the recent discourse and developments surrounding conversions, he asked the task force to review its earlier recommendations to ensure that the league is continuing to proceed appropriately.
"The league stands by our original recommendations," said Davis. "We believe the league-and our leader Dick Ensweiler-is taking appropriate actions to strengthen the credit union charter and to educate credit union members about how a conversion would impact them."
According to the Texas league, those steps have included:
* TCUL continues to pursue legislative and regulatory changes to strengthen the credit union charter, most notably the Credit Union Regulatory Improvements Act (CURIA).
* The league has requested that the Texas Credit Union Department adopt stronger conversion disclosure requirements that are in parity with NCUA standards.
* TCUL has created a new consumer-oriented website with helpful information about the credit union advantage and how a conversion would impact credit union members.
* The league has initiated contact with more than half a dozen Dallas-Fort Worth reporters in an effort to generate media coverage to ensure members know what they are voting on.
* In addition, the League has been actively engaged in discussions with other credit union and league leaders who are also studying this issue.
* However, the task force continues to believe that it is not appropriate for the Texas Credit Union League to actively interfere with a business decision made by an individual credit union.
The only change the league said it has made to the language was to specifically highlight the League's support for CURIA and its provisions, including reforming current capital requirements and restrictions on member business lending and establishing a 20% threshold for participation by credit union members in a conversion election.