United 1st seeks members' OK to convert to state charter
United First Federal Credit Union in Kingsland, Ga., is the latest credit union to apply for a conversion from a federal charter to a state charter.
A FAQ on the $171 million-asset credit union’s website said converting to state regulation would allow for additional growth by allowing it more flexibility to widen its field of membership, give it parity with Georgia’s state-chartered banks, allow it to gather non-member deposits even without a low-income designation and more.
The coronavirus and economic crisis could have a long-ranging impact on the credit union charter landscape, but United 1st said its decision pre-dates the pandemic. Senior management has been working with the state’s Department of Banking and Finance for the last two years. The application to convert was submitted to NCUA early this year and subsequently approved.
“Because of timelines set by the state, we need to continue moving the process forward,” the credit union said in the FAQ. “Because we are unsure how long social-distancing measures will be in effect, conducting a virtual meeting seems to be our best option at this point in time. A virtual meeting, along with online voting, will also allow for more member participation than conducting a traditional meeting in one of our branch locations.”
All members age 16 and older have been mailed a ballot on the charter change, but e-voting is also available. All votes must be submitted by May 28.
United 1st’s move is similar to a recent announcement from Michigan-based CP Federal Credit Union in that both are seeking more flexibility with field of membership rules than the federal charter can currently provide.
The credit union posted a net income of just over $2 million for 2019, up about 2.6% from what it earned the year before. Its first-quarter call report for 2020 was not available at the time this story was published.