Despite opposition from its own trade association, a small credit union in Charleston, S.C., intends to convert to a mutual savings bank and merge with a neighboring mutual that was a credit union itself until last year.

Roper Federal Credit Union, which serves the employees of Roper Hospital and their families, is seeking to combine with $25 million-asset Carolina Federal Savings Bank because the credit union's "plain vanilla" menu of services no longer meets its customers' needs, according to its chief executive officer.

"Our membership is growing, and people are clamoring for things like automated teller machines, credit and debit cards, and mortgage loans," said CEO Oscar C. Rebula. "We do not offer any of those things now, so we had to do something. There is no need for us to exist if we cannot satisfy our members."

The Roper-Carolina Federal merger deal, disclosed Monday, would create an institution with three branch offices, assets of $32.3 million, and more than 4,800 members. Roper's board of directors needs a majority vote from the union's members on the conversion, which would then need approval of the Office of Thrift Supervision. The merger also needs OTS approval.

Mr. Rebula said he hoped Roper's shareholders will vote on the merger "in the next few months." In the meantime, he has to contend with the South Carolina Credit Union League.

A week before Roper and Carolina Federal revealed their deal, the league adopted a policy opposing any credit union-to-mutual conversion.

"When this policy was passed, we had no idea what was going on at Roper," said John Franklin, the league's president. "We had hoped for a longer period of peace" before having to act on the policy. Mr. Franklin said the league would mount a publicity drive to get Roper shareholders to reject the conversion and merger.

Mr. Franklin said there is precedent for such a campaign: the Wisconsin Credit Union League, which in 1997 took out a series of newspaper advertisements aimed at shareholders of an Altoona credit union whose board had proposed converting to a mutual savings bank. The members voted down the conversion.

Alan D. Theriault, a Cumberland, Maine, consultant who is advising Carolina Federal Savings Bank, said any effort by the South Carolina Credit Union League to block a member organization's initiatives would backfire.

"What does it say if they have to use force to keep their membership?" asked Mr. Theriault, who advised Carolina Federal, the former Sacred Heart Credit Union, when it converted to a mutual savings bank Aug. 1, 1998.

Eleven credit unions have converted to mutual savings banks since 1995, but only one has ever merged with a bank. Caney Fork Cooperative Credit Union in McMinnville, Tenn., merged this year with Beacon Federal Mutual Savings Association of Syracuse, N.Y. Beacon converted from a credit union to a mutual savings bank July 1, 1999.

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