STRATFORD, Conn. - This small city of 50,000-plus residents in southwest Connecticut has always been best known for its Shakespeare theater. Among credit union circles, the city is also known now as the headquarters for the first federal credit union in the state-Sikorsky FCU-to apply for a state charter. Dave Tedesky of the Connecticut Office of the Banking Commissioner confirmed that Commissioner John Burke received the conversion application from Sikorsky FCU on April 20. When Credit Union Times went to press, the application was out for its 10-day comment period, and the credit union was simultaneously pursuing the necessary paperwork requirements with NCUA (Sikorsky President Tom Williams said NCUA Regional Director Layne Bumbardner had confirmed receipt of Sikorsky's conversion application.) When the charter conversion is completed, the credit union will be known as Sikorsky Financial Credit Union. Its field-of-membership will include "persons who live, work, worship, volunteer, or businesses, partnerships, corporations or organizations located within the state of Connecticut with the specific exclusion of the existing fields of membership of the following credit unions: Amphenol RF Operation Employees Credit Union Inc.; The B.M.G. Credit Union Inc.; Bethel Stamford CU Inc.; Brand-Rex Employees CU Inc.; The Coca-Cola of Hartford Employees CU Inc.; The East Haven Municipal Employees CU Inc.; Enbic Company Employees CU Inc.; The Harborview Credit Union Inc.; Heim Employees CU Inc.; Taylor & Fenn Co. Employees CU Inc.; and U.S. Baird Employees CU Inc." The credit union will remain federally insured. Unlike other states such as California which have witnessed a wave of federal-to-state charter conversions, Connecticut has been relatively charter conversion free. There are currently 54 state-chartered credit unions and 153 federal credit unions operating in Connecticut. There are also six out-of-state CUs operating branches in the state. Those numbers have remained almost unchanged over the past few years. The majority of them are small CUs under $5 million in assets. Sikorsky FCU is among the handful of large credit unions in the state. Chartered in 1948 to serve the employees and families of Sikorsky Aircraft, the $312 million CU counts among its approximately 46,000 members about 200 select employee groups primarily in Fairfield and New Haven counties and also throughout the U.S. and internationally. Williams said Sikorsky's decision to apply for a charter conversion was prompted by one single factor - the ability to be able to increase its membership. Faced with a major downsizing by Sikorsky Aircraft, the credit union has seen the number of employees at the company and its membership base drop from about 8,000 to 6,000. He explained that Sikorsky FCU did consider converting to a community charter, but "the strength of our membership is in the two counties we serve which make up about half the state (of Connecticut)" and that meant the credit union would have exceeded the 300,000 population limit under IRPS-99, NCUA's Field of Membership and Chartering Manual. Another option was for the credit union to remain federally chartered and simply add more SEGs. Williams said this choice was unacceptable because "NCUA is too slow to approve SEG additions." Williams said he does not anticipate any problems with the conversion application from Commissioner Burke because "the commissioner has given us his full support in pursuing the conversion if that's what we want to do. He's a great believer in competition." The only holdup Williams expects is with NCUA because of the agency's bureaucracy, but even here he says there shouldn't be much of a problem. Sikorsky is over 15% capital and has a CAMEL 1 rating. "There's no safety or soundness reason NCUA should deny our conversion request," Williams said. "It's not like we're trying to jump ship." Barring any blips, Williams hopes the charter conversion will be completed before the end of the year. He remarked that as far as he knows, no other federal credit union in Connecticut is considering converting to a state charter, including American Eagle FCU in East Hartford whose primary sponsor, Pratt & Whitney, has also downsized. -
ekingoff@cutimes..com
