The National Credit Union Administration should keep out of attempts by state-chartered credit unions to convert to thrift charters, a group of state regulators said.
Douglas Duerr, president of the National Association of State Chartered Credit Unions, said any bid by the agency to get final approval power over charter conversions by federally insured credit unions would be "an inappropriate reach into state authority."
Most state-chartered credit unions are insured by the National Credit Union Share Insurance Fund, which is administered by the federal regulator.
"It's inappropriate for NCUA to extend its reach by virtue of the National Credit Union Share Insurance Fund by regulating something provided for by state law," Mr. Duerr said.
The federal regulator has not yet drafted any new regulations.
But agency officials said they want final say over attempts by federally insured credit unions - including state-chartered ones - to change their charters.
Agency officials said they are concerned that financial gain for insiders might be the only motivation for such a conversion.
The agency is moving in response to efforts by law firms to get credit unions to change charters.