WASHINGTON – In a letter which belied its stated intent to turn down the rhetoric surrounding credit union-to-bank-charter conversions, the Coalition For Credit Union Charter Options, the pro-conversion group which is advised by former credit union executives which have become bankers, has alleged that a “backroom deal” might be afoot to “trap credit unions in a no-capital, low-growth coffin forever.” The group used the term in its first appeal for members and donations. “Maybe the scariest scenario is a backroom deal over a taxation compromise,” the group wrote. Industry speculation has it that large credit unions could become taxable and not be able to exit the charter. “The credit union industry could embrace the inevitable demise of its tax exemption and stay viable because the door to conversions would be closed. Bankers won’t fight for conversions, and it’s certainly not in the credit union trades’ interest to protect the option. But a sellout like this could trap credit unions in a no-capital, low-growth coffin forever.” Ironically, the Coalition also suggested it was time to “set aside the inflammatory rhetoric” around the charter change issue. It also suggested that NCUA has an eventual goal of requiring 50% of credit union members to participate in a charter change vote, suggesting that the 20% included in CURIA is merely a first step. Significantly, the organization recommended dues ranging from $2,000 to $25,000 and offered new members an opportunity to have their names listed publicly if they chose. Previously the group had said that it would not publish the names of any of its members. Unsurprisingly, the Coalition’s letter drew a hot response from Dan Mica, CEO of CUNA. Mica called the letter’s claims absurd, false and irresponsible. “This group, in its zeal to convert credit unions into banks, is throwing around wild allegations about backroom deals, taxation compromises and the like that are not only false, but absurd,” Mica said. “We would hope and expect this organization in the future would act more responsibly. They can begin by dealing in fact, not groundless speculation. Deceitful and disingenuous practices have no part to play in any honest discussion of the conversion issue.” -

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