Two advocates for the option to convert from a credit union charter to a mutual savings bank charter defended that option amid some sharply pointed questions from credit unions attending a debate hosted by MACUMA here last week. Marvin Umholtz, the membership director for the Coalition for Credit Union Charter Options, and attorney Robert Freedman, who has been involved in a number of credit union charter conversions, strongly advocated the right of credit unions to convert and repeatedly stated the motivation is not "insider enrichment" and that a mutual savings bank charter is not right for 95% of credit unions.
Freedman said he does not oppose "some type of distribution" of net worth to all members when a credit union converts charters, but does oppose any type of requirement that a certain period of time pass before anyone associated with the credit union can cash in on the issuance of stock. Umholtz said he believes NCUA's actions in Texas, where the agency challenged the way paper was folded in materials provided to members of Community CU and OmniAmerican CU, "has done more damage" in Congress "than anything else you could do. You need too many other things than this. The credit union industry is becoming laughable because people think you're nuts." The session was moderated by CU Journal Publisher Frank J. Diekmann.
