As reported in the January 30 edition of the Credit Union Times, the Aite Group consulting firm's survey of larger credit unions entitled, "The Evolution of the Credit Union Market: A Survey of Credit Unions," has generated a lot of talk and speculation. The survey's finding that 33% of these credit unions say they plan to convert to the mutual savings bank charter has come as a big surprise to many industry watchers. Applying these survey findings to the total number of credit unions over $100 million in assets suggests that as many as 400 institutions may convert charters. By any measure, that's significant.

The real irony of the situation is that the barn door may have already been bolted shut just when these 33% scramble to escape the flames. Over the last three years, the NCUA Board has systematically increased the regulatory hurdles involved in charter conversions and has disproportionately empowered the outsider-funded dissident groups that actively oppose these conversions on philosophical grounds. By experts' estimates, the charter conversion process is between three and 10 times more complex and expensive than it was just three years ago.

At its January 2008 meeting, the NCUA Board announced its plans to encumber the conversion process further, plus complicate the CU-to-CU and cross-charter merger options by adding similar ill-advised regulatory obstacles. After allowing for a comment period on its conceptual Advanced Notice of Proposed Rulemaking-Parts 708a and 708b, this April, the NCUA Board is expected to detail its planned new hurdles for these credit union governance and structural changes. Unfortunately, the NCUA Board has yet to learn that the inherent problem with transparency is that people see through it.