To the Editor:

You miss the mark in "States Adjust Credit Union Laws to Match U.S. Charter" [Jan.16]. While the article accurately reflects the fact that several states have enacted credit union legislation in recent years, and that Maryland is studying a proposal to redraft the state's credit union law, its assertions that (a) state legislatures have mimicked the Federal Credit Union Act, and (b) there is an "exodus to the federal charter" are incorrect.

The facts are that the state credit union charter has become the "charter of choice" in many states, and that in most states there is no exodus from federal charter to state charter.

A review of the credit union conversion activity in the first 10 months of last year shows that 11 of the nation's 4,610 state-chartered credit unions converted to a federal credit union charter. The data also show that 43 of the nation's 6,000-plus federally chartered credit unions converted to a state credit union charter.

These numbers do not support a contention that there is an "exodus" from state charter to federal charter, but at the same time they would not support a contention that federal credit unions are chasing a state charter.

What the numbers do show is that the dual chartering concept is just as advantageous to the nation's credit union system as it is to the nation's banking system.

During the last several years, state acts have been amended to:

  • Allow state credit unions to substitute loan, membership and investment officers for credit committees, membership committees and investment committees.
  • Give state credit unions the authority to provide services which credit union members want and need such as insurance products, limited trust products, and the expansion of loan terms to meet changing consumer needs.
  • Allow credit union boards to decide who is in the credit unions' field of membership.
  • Even roll back taxes which created a disparity between federal credit unions and state credit unions.

You get it right when saying a federal charter may have become more attractive than it was as a result of Congress' lifting of membership restrictions, but you but miss the point that the Congressional remedy merely provided federal credit unions with the options which have long been available in many states. Caryn A. Adelson
Communications manager
National Association of State Credit Union Supervisors
Arlington, Va.

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