Tech CU: Hampel Totes Ups Cost of Conversion
If the roughly 73,000 members of Technology Credit Union, a $1.5 billion institution headquartered in San Jose, Calif., vote to convert to a mutual bank charter, they will likely find their increased expenses not restricted to taxes alone, according to CUNA Chief Economist Bill Hampel.
Technology CU posted a notice to its members about a potential charter change earlier in October and has scheduled a board vote on Nov. 2 to formally consider making an application. In order for the CU to change charters, a majority of members voting would have to approve it. Technology has not returned calls for comment on the potential charter change.
Then there is the potential loss of shared branching. Technology Credit Union is a participant in the Financial Service Centers Cooperative, and the credit union told members that if they use shared branching to make transactions as credit union members, they will not be able to do so as bank customers, though the credit union said this would only inconvenience “a small percentage” of members. Technology also said its planned additional ATMs with deposit capability will ease some of that inconvenience and suggested the loss of shared branching would be worth it.
“Additionally, the board and management believe that access to additional capital available to a federal mutual savings bank, and other factors, outweigh the loss of shared branching in the long run,” Technology wrote.