Technology CU Files for Conversion to Bank
The 73,000-member Technology Credit Union has filed with the NCUA to convert to a mutual savings bank charter.
The $1.5 billion CU is headquartered in San Jose, Calif.
“Tech CU's Board of Directors believes that, as a mutual savings bank, Tech CU will be able to significantly expand its commercial lending business,” the credit union board said in a letter to members on its website.
“While we will continue to be primarily a residential and consumer lender, we will seek to diversify our loan portfolio by increasing secured commercial and industrial lending to small and mid-size businesses in our market area,” the letter said.
“Tech CU's Board of Directors believes that this should improve our earnings since commercial loans generally carry higher interest rates and origination fees than typical residential mortgage and consumer loans,” it said.
The letter continued: “The additional revenues that Tech CU's Board of Directors believes will be generated by this type of lending would be used to support and enhance our existing products and services, and provide our current and future members with the valued financial products and services, and cutting-edge technology they want and expect.”
The CU's board also cited the ability gain more capital as a reason for considering charter change as well the ability to serve the broader community without field of membership restriction.
As per the NCUA's regulations, the CU also invited member comment on the possible change and the board indicated it will consider adopting the charter change proposal on Nov. 2.