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CHICAGO – The Woodstock Institute, an occasional critic of how well credit unions serve the low-income, has sent a letter to the NCUA expressing concern about the phenomenon of credit unions changing their charters to those of mutual banks. “Woodstock fully supports consumer choice,” wrote Woodstock senior vice president Marva Williams in the August 23 letter. “But in our opinion credit union conversions to mutual savings banks may be to the detriment of consumers and communities. Our years of research on the comparative suitability of different financial products for lower-income families show that credit unions have significant advantages over other regulated financial institutions,” the letter said. Williams noted that Woodstock still has concerns that credit unions may not be serving low-income members as well as they could, but pointed out that credit unions engage in more financial literary education and offer more affordable products and loans than banks. She also cited a recent Woodstock study which documented how credit union-issued credit cards have fewer fees, lower fees, lower default rates and much clearer terms and conditions. In conditions where credit unions are considering conversions, Williams wrote that the NCUA should push the credit union to show that such a move will bring real benefits to CU members and should even allow a community to weigh in on how it would feel about a conversion. “In the event that a conversion is being considered, the members of credit unions should be fully informed on how it will impact their voting rights and access to affordable services and loan products,” Williams wrote. “Further, credit union board of directors and senior management should provide objective information on the advantages and disadvantages of a conversion as well as any financial returns to them. The NCUA should ensure that the conversion offers tangible benefits for the members of the credit union and that any retained earnings are returned to the members. In addition, a suitable public comment period as well as shareholder meetings should be instituted prior to the distribution of ballots.”

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