In Wake of Utah CU Charter Conversions, NASCUS Reevaluates its System to Apprise SCCUs of Issues

ARLINGTON, Va. – NCUA’s recent approval of applications from four Utah state-chartered credit unions, including the state’s two largest, to convert to federal charters has not gone unnoticed by NASCUS. In fact, the agency’s actions have forced the association to evaluate the job it’s done until now keeping state-chartered credit unions and regulators apprised of the challenges to state-chartered credit unions throughout the U.S. “We recognize these types of challenges pose a threat to the future of the dual chartering system and the viability of state-chartered credit unions in affected states. We also realize we probably haven’t done enough and need to do a better job providing information and resources such as research and analyses to credit unions and state regulators on emerging issues affecting the dual chartering system,” said NASCUS President/CEO Doug Duerr. Duerr of course was referring to NCUA’s approval of state-to-federal charter conversions of Utah’s America First CU, Riverdale; Mountain America CU, Salt Lake City; Goldenwest CU, Ogden; and Tooele FCU. The Utah Bankers Association and American Bankers Association have already scathingly attacked the NCUA Board’s decision. The ABA also said it may sue the agency over the board’s decisions (CU Times, May 14). Duerr said NASCUS wants to show state-chartered credit unions and regulators how dual chartering issues have been handled in the various states “so each can learn from one another” and provide them information on the challenges, as they unfold, as well as public policy positions. In the past, said the NASCUS president, it’s been left to the leagues to disseminate information. That’s made sense, said Duerr, since leagues work their state legislature and have first-hand knowledge of credit union tax-related proposals from bankers. NASCUS, said Duerr, has to work closer with CUNA and legislators to make sure they understand when issues are developing, instead of relying on the leagues to get this done. “NASCUS needs to create better communication tools and effectively tap these resources,” said Duerr. “The credit union movement doesn’t benefit by the exodus of state-chartered credit unions to federal charters, or vice versa.” Duerr offered that it was “evident to the banking community for some time what was happening with the Utah situation.” To meet its objective, Duerr said NASCUS plans to “reallocate and shift its resources” The association intends to put more emphasis on the regulatory service function, provide greater regulatory services, and “put more energy into targeting these types of issues.” Increasing the quality of supervision and the value of the state charter are the goals of NASCUS, said Duerr. `Our challenge is to be alert and look for changes happening in the credit union movement that indicate changes, and then take action steps to address them,” he said. “There’s a growing tension between credit unions and banks. That tension is being transformed to legislative efforts. If NASCUS can provide state legislators with information showing them the implications of their decisions, then it will be more likely legislators will fashion the law so there is no damage to the dual chartering system,” Duerr said. -