WASHINGTON -- Credit union conversions to mutual savings banks are a threat to the entire credit union movement Congressman Paul Kanjorski (D-Pa.) told attendees of NAFCU's Congressional Caucus.
"If we don't correct what's going on out there, we're going to have a major negative backlash..." the veteran lawmaker who serves on the Financial Services Committee warned. "I see raiding as a threat to the credit union movement."
One possible solution, he said, to help curb the potential conflict of interest would be to move the members' capital to another institution that would carry on the same type of work as is currently done with charities. However, Kanjorski said he would rather discourage conversions altogether.
Another option would be to tax the capital upon conversion, "but that opens the door to taxation."
The lack of a minimum voting requirement to convert to a mutual savings bank was the product of an H.R. 1151 compromise. CURIA, he said, would at least require 20% of the membership to vote, adding, "I actually think that's too low." However, the political reality is that is likely the highest level that could get through Congress.
Kanjorski added that the underlying issue of fairness is a great one to take to Capitol Hill. "Conversions are a great issue. Everyone can grasp it," he said. --scooke@cutimes.com
