ARLINGTON, Va. – Two more credit unions have filed applicationswith the Office of Thrift Supervision to become federally charteredmutual thrifts. Share Plus, a $161 million federal credit unionwith 20,000 members is headquartered in Plano, Texas, and filed onDecember 1. Sunshine State Credit Union, a $150 million statechartered credit union with 18,000 members is headquartered inTallahassee, Florida, and filed on November 21. That brings thetotal number of credit unions which have either become thrifts orwho have merged with banks or who have filed to become thrifts to29. Neither credit union's members have learned, formally, abouttheir institutions filing to convert. Both institutions are waitingfor NCUA to approve the disclosure notifications they will send totheir members. When asked whether they plan to convert to a stockissuing institution, Craig Barnes, CEO of Share Plus, said hisinstitution had no plans to do so. But Mark LeCain, CEO of SunshineState, wouldn't close the door on that option. “I think that willbe one of the options open once we become a mutual thrift,” hesaid. Each credit union cited some of the same restrictions intheir charters that, they said, led them to believe changing to amutual bank would be useful. Barnes said that increasing numbers ofhis members had been asking about member business loans in recentyears and said the inability to make these loans into the futurehad been one of the reasons for the change. He also said hisinstitution looked forward to making more and longer term mortgageloans than it could under the current charter. But he alsoacknowledged that Share Plus had not made any member business loansas a credit union. NCUA's records confirm this, and show as wellthat the credit union has almost $86 million in outstanding realestate loans, in both fixed and adjustable rate, and made 573 realestate loans in 2003, as of September 30. Fifty-six of those werefixed rate first mortgage loans. Barnes reported that the move tochange charters had been the result of a two-year planning processthat had focused on what moves the credit union would have to makein the future to better serve its members. He also made it clearthat Share Plus would not have moved forward with the idea withoutfirst getting the backing of the group's major sponsors all ofwhom, he said, encouraged the credit union to make the move. SharePlus began in 1958 as Dallas-based Frito Employees Federal CreditUnion and grew as its sponsor merged and grew with other firms. Nowthe credit union's field of membership includes employees ofFrito-Lay, Inc., YUM! Brands, Inc., A&W Restaurants, Inc., KFCCorporation, Long John Silvers, Inc., Pizza Hut, Inc., Taco BellCorp., and various parts of PepsiCo, in addition to roughly 50Dallas area SEGs. In contrast LeCain said that the topic ofchanging charters had been a possibility for his institution sincethe late 1990's. “I can remember planning sessions from years agowhen the question `would we still be a credit union five years fromnow' would be on top of the list of possibilities,” he explained.Sunshine State, like Share Plus, would like to make more memberbusiness loans and more 30-year mortgages, according to LeCain.But, like Share Plus, Sunshine State only has one MBL on the booksas of September 30, for $111,182 and did not book that loan thisyear. NCUA data also shows that the credit union has $49 million inreal estate loans and that it booked 221 loans as of September 30.Of those, 65 were fixed rate first mortgages. LeCain explained thatthe credit union's history and the fact that it has pretty close toa state-wide charter already precluded the credit union solvingsome of its problems with a community charter. Currently SunshineState has a field of membership that includes current and retiredcity, county, state or federal government employees in the state ofFlorida; employees of commercial or industrial firms that do nothave a sponsored credit union, and members of “associationalgroups.” Tony Ward Smith, a noted credit union consultant andopponent of credit unions converting to thrifts estimated that thetwo newest credit unions might represent the leading edge of a waveof conversions, spurred in part by the work of consultantsconvincing credit union boards to make the changes and by the fearthat political pressure may be building to stop the practice. “Wemay see 30 or 40 more of these coming soon,” he said, “as morecredit union boards of directors are told that they can do this andfear not being able to in the future.” But Alan Theriault, whosefirm CU Financial Services has helped most of the credit unionsthat have made the jump to thrifts, forecasts no more than a dozencredit unions converting in 2004, and that the end number may be asfew as five. “I would be happy if we saw five next year,” Theriaultsaid, adding that he has been puzzled that more institutionshaven't made the change before it might become more difficult to doso. “There are lot of people who just haven't made up their mindyet.” -

Complete your profile to continue reading and get FREE access to CUTimes.com, part of your ALM digital membership.

  • Critical CUTimes.com information including comprehensive product and service provider listings via the Marketplace Directory, CU Careers, resources from industry leaders, webcasts, and breaking news, analysis and more with our informative Newsletters.
  • Exclusive discounts on ALM and CU Times events.
  • Access to other award-winning ALM websites including Law.com and GlobeSt.com.
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.