California Assessment Changes for State-Chartered CUs: Print Preview
If the three largest state-chartered credit unions in California were to convert to federal charters, the state’s regulator would lose $1.7 million of its $7.2 million budget, leaving small and midsize state-chartered credit unions to subsidize that loss.
That’s the worst-case scenario the California Credit Union League wanted to avoid, and the reason the league successfully lobbied the state legislature to approve Assembly Bill 1282, which establishes a new assessment table that provides more parity between state assessments and NCUA operating fees. The bill was signed into law by Gov. Jerry Brown on Aug. 16.
Alan Cortum, president/CEO of the $45 million Valley Oak Credit Union in Three Rivers, Calif., said he understands CCUL’s rationale for the new law.
“If some of the big credit unions decided to go, they would redo the assessment which would make it higher on us that are left, because they will be looking for the same pool of money to run the state-chartered program,” Cortum said. “And in that scenario, we all lose.”