An expansion-minded Ohio federal credit union, saying this was its only growth option, has applied for a federal mutual thrift charter.
Ohio Central Federal Credit Union filed the application in reaction to an October 1996 court decision prohibiting the membership expansion strategy it was using.
In a lawsuit bankers filed against AT&T Family Federal Credit Union, a federal appeals court said occupation-based credit unions may not accept members from unrelated companies. The Supreme Court will hear the case Oct. 6, but Ohio Central's management said it doesn't want to wait until next year when a decision is expected.
The 48-year-old credit union's best option is to convert to a federal mutual thrift so it may continue to diversify its customer base, said Robert Hughes, president and chief executive of the $30 million-asset Dublin credit union.
Under current regulations, more than 50% of the credit union's members must vote for the thrift conversion for it to be approved.
Mr. Hughes said he believes getting enough members to the polls will be the toughest part of the conversion.
The National Credit Union Administration, the industry's regulatory agency, said credit-union-to-mutual-thrift conversion applications are on the rise as a result of the AT&T case.
In the last 16 months, six credit unions have applied to the Office of Thrift Supervision for mutual thrift conversions and to the Federal Deposit Insurance Corp. for deposit coverage. This is the most applications ever received during such a period, said Robert Loftus, an NCUA spokesman.
Mr. Hughes said the credit union plans multiple mailings to members in an effort to get out the vote. If Ohio Central fails to convert, he said, it will continue its fight to relax membership restrictions.