ARVADA, Co. — When the credit union members of the Colorado Credit Union Association meet next year, they will be asked to revoke an existing bylaws provision that allows credit unions that convert to mutual savings banks to remain members of the association.
The bylaw currently states that "[a] credit union that has converted to a mutual savings bank may retain its full membership in the association with all the rights and privileges related thereto, subject to the terms and provisions set forth in these bylaws, as amended, and such other conditions of membership as the board of directors may adopt from time to time." In a message to member credit unions, CCUA Chairman Bill Sterner said the bylaw had been passed years ago when "banks were not aggressively attacking credit unions and trying to convert our members to banks." Now, Sterner wrote, bank lobbyists and their supporters are seeking to convert credit unions to MSBs and then to full stock banks. "In light of these changed circumstances, your board not only feels that our MSB provision is outmoded and unnecessary, but would create a practical nightmare for our day-to-day operations and is contrary to the long-term interests of Colorado's credit unions," Sterner wrote.
The board adopted an interim policy that bans MSBs from being members of the association until the membership can vote in 2007, Sterner said.
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The board also voted unanimously to allow association staff to respond to any future conversions in much the same way as other associations and leagues have done, Sterner explained.
Sterner noted that although no Colorado credit unions have sought to convert their charters and that none appear ready to do so, the emphasis by banks on the "contain and convert" strategy necessitated the change.
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