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Contact:	Robert Schmermund (202) 857-3104 Jim Eberle (202) 857-3145	Jim Eberle (202) 857-3145 (work) (703) 893-2593 (home) [email protected]	For Immediate Release February 19, 2004 #04-09
E-mail: [email protected]

STATEMENT ON NCUA CONVERSION RULE

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Statement by Diane Casey-Landry, president and CEO, America’s Community Bankers, on the regulation adopted by the National Credit Union Administration today making it more difficult for credit unions to convert to mutual savings bank charters:

The NCUA has erected a Berlin Wall around credit unions, making it difficult, if not impossible, for them to make a business decision to convert to a mutual savings bank charter. Making things even worse, the NCUA staff now has been directed to study an additional rulemaking to further restrict conversions. The regulator’s anti-charter choice position reflects a blatant disregard for the rights of credit union members.

Not surprisingly, many of the credit unions that commented on the NCUA’s proposal expressed their strong opposition, as did America’s Community Bankers, which said the NCUA was exceeding its statutory authority.

Security Service Federal Credit Union, San Antonio, Texas, said: “The proposed rule would create conditions under which member approval of charter conversions would be extremely difficult, and thus, serve as an unnecessary barrier to conversion.”

Three Rivers Federal Credit Union in Fort Wayne, Ind., said: “I question NCUA authority to require this without changes to the Federal Credit Union Act. It seems to us they [NCUA] are trying to protect their own turf.”

Max Federal Credit Union in Montgomery, Ala., said: “We cannot support those portions of the proposed amendment that would needlessly box in the future direction and options of any credit union.”

Clark County School Employees Credit Union in Vancouver, Wash., said: “I believe the proposed rule oversteps the intent of the CUMAA [the Credit Union Membership Access Act]. I think the additional disclosure requirements exceed conversion rules of other financial regulators and are more restrictive to other charter conversion rules.”

CU Financial Services, Portland, Maine, said: “The rule requires actions that result in an illegal attempt to influence a no vote and make conversion more difficult than Congress intended.”

One must ask, “What is the NCUA afraid of? Are credit union members not capable of making decisions in the best interest of the institution, the members and the community?” We think they are.

ACB believes that all financial institutions, including credit unions, should have the ability to determine what charter best fits the institution’s business plan and meets the needs of the local community.

The NCUA should take a lesson from the former Soviet Union. It should be eliminating obstacles to economic freedom, not erecting artificial barriers simply to protect their empire.

America’s Community Bankers is the national trade association committed to shaping the future of banking by being the innovative industry leader strengthening the competitive position of community banks. To learn more about ACB, visit www.AmericasCommunityBankers.com.

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