WASHINGTON - The Office of Thrift Supervision has delayed its decision on Lusitania Federal Credit Union's application to convert to a mutual savings bank charter.
The agency's ruling, expected Feb. 6, was put off to give its regional office time to gather more information, said OTS spokesman Bill Fulwider. The Newark, N.J., institution's fate should be decided by March 6.
Sources said the agency is taking its time to avoid offending the National Credit Union Administration, which will take up the matter on March 1.
Mr. Fulwider denied any ulterior motive.
"It sometimes happens that deadlines are extended because of various reasons," Mr. Fulwider said. "It doesn't mean anything."
Sources have been expecting the OTS to approve the application. Last year the agency streamlined its rules for credit unions seeking to switch to a thrift charter - a move that drew a sharp rebuke from the NCUA.
On Jan. 23 members of Lusitania voted overwhelmingly - 97% of votes cast - to switch to a federal mutual savings bank charter. However, the NCUA's Middle Atlantic region has said it will recommend that the board veto the institution's application.
The regional NCUA office said disclosure statements about the differences between credit union and thrift charters that Lusitania gave its members were insufficient. The agency had rejected three earlier statements.
The NCUA claimed that the most recent disclosure statement was inadequate because it lacked a chart comparing the regulatory expenses of a thrift and credit union charter and some language regarding mortgage loans was confusing.
"In the absence of these revisions or other alternatives, we continue to take issue with the proposed disclosure as concerns mortgage loans and increased regulatory fees," NCUA Mid-Atlantic acting regional director Robert F. Schafer wrote in a Jan. 25 letter.
The credit union did give its members adequate information to make a charter choice, insisted Samuel J. Malizia, senior partner of the Washington law firm Malizia, Spidi, Sloane & Fish, which is representing Lusitania.
Nothing in the disclosure statement was misleading, he added.
