HIALEAH, Fla. - Deciding to apply for a charter conversion is never an impulsive decision. Aside from the paperwork that's involved in a filing, the decision has profound strategic business decisions for a credit union. For FPL FCU, the decision last month to convert to a state charter came down to one thing, said President Henry Prior - the credit union's ability to expand its field and membership and provide members quality products and services. After that, everything else fell into place. "It doesn't make a difference whether a credit union is federal or state chartered," says Prior." It's all transparent to them. What they care about is the continued viability of the credit union to be able to provide them with quality service and products." So does the credit union, and that's why it decided to submit a proposal for charter conversion to NCUA and the Florida Department of Banking and Finance, division of banking, according to section 657.067 of the Florida statute. Under Florida administrative rule, the division has 90 days to give its approval. Prior said a NCUA vote is tentatively scheduled for June 19. FPL was chartered as a federal credit union in 1951. The $226 million credit union counts about 142 select employee groups mostly in Dade, Broward and Palm Beach counties in its 39,000 membership. Prior explained that FPL didn't begin adding SEGs until about 1994 and "by that time, most of the larger SEG opportunities were already signed up with other credit unions." So most of the SEGs FPL has taken in are relatively small. "Under a federal charter, we have limited availability to select employee groups to allow us to expand," he remarked. " We have a strong primary sponsor, but we still need to diversify. When has putting all your eggs in one basket ever been prescribed as good business policy?" Running the credit union under a state charter will allow FPL to explore FOM expansion opportunities outside of its current SEG limitations. Florida has only one type of credit union charter-there are no association or community charters-so that means FPL will be able to bring new select employee groups into the credit union's field of membership without sacrificing any of its current SEGs. "I can't lose my ability to serve the FPL employees," said Prior. Although Florida has had only a handful of federal-to-state charter conversions so far this year, Prior is aware of comments that have been made concerning the wave of charter conversions, especially in California. He is not daunted by the trend or see in it any writing on the wall about the shift in balance of the dual chartering system. "Doesn't almost every state have a dual chartering system for every financial?" he asked. "The federal-to-state charter conversion trend we're witnessing is not the death knell for credit unions. I don't understand what all the ruckus is about." Coming to FPL from the savings and loan industry where he held a top management position, Prior says he'll be able to leverage his experience in going out into communities and building FPL branches. "I'm used to working in the community," he commented. Prior expects FPL's conversion to a state charter to be finalized by mid-July. -
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