The $145 Beehive Credit Union, headquartered in Salt Lake City, formerly a candidate for a mutual bank charter, is no more.
The Utah Department of Financial Institutions took possession of the CU yesterday and immediately appointed NCUA as liquidator. NCUA, in turn, announced that the $5.9 billion Security Service Federal Credit Union, in San Antonio, Texas, has purchased Beehive.
The Department cited Beehive's negative net worth and said it was not in a safe or sound condition to transact business. The latter condition is one of the 11 statutory reasons the Department can take over a depository institution under Utah law.
Beehive gained notoriety in 2007 when it filed an application to convert to a mutual bank charter. But after having won member approval for the change in 2008, the CU backed off its proposal early in 2009.
According to a story in the Salt Lake Tribune, credit union CEO Scott Jorgensen cited "turmoil" in the economy, and especially the banking arena, as reasons the CU decided a charter change now would not benefit the CU's members. He also cited "extreme reluctance" among federal regulators to approve the charter change in the current economic and regulatory environment.