These plans, which must be approved by depositors, have often been vehicles that critics have charged CU staff have used to enrich themselves from the conversion and stock offering.

The CU also told members that, unlike other charter conversions, it would continue to hold to a one member/one vote standard of credit union governance, though noting that the bank may solicit proxies from depositors for voting.

As for reasons for the change, Lafayette told its members that they should convert the credit union to a mutual bank because the regulatory environment that it faced was much more difficult than that faced by banks and that the prospects for regulatory change were not good.

"We had hoped that the United States Congress would enact laws that would provide greater member business loan authority, capital relief and other regulatory benefits that credit unions have requested," Lafayette wrote in the cover letter accompanying the disclosure packet. "The credit union industry has been trying for almost three years to have these measures enacted. We strongly believe that relief will not come in the near future, if at all, and therefore we believe it is prudent and advisable to act on our own initiative to achieve such relief rather than leave it to the political process."

The CU then laid out some specifics of how members would benefit from the charter change involving prospects for additional business and member business lending and access to capital.

When it came to prospects for additional business, Lafayette noted that it was in a very competitive market and that the field of membership limitations hurt its growth.

"Although Lafayette has access to an estimated one million potential members in the D.C. metropolitan area, which at the end of 2005 consisted of about 5.3 million persons, their dispersion among various employee groups makes it difficult to serve and market to them efficiently," Lafayette wrote. "Print, billboard, radio and television advertising is expensive and impossible to restrict to only those who are eligible. We therefore spend significant sums reaching ineligible people."

The NCUA's numbers bear this out, indicating that the CU has only 16,000 members out of a potential one million. But members skeptical of the charter change proposal wondered why the credit union hadn't done more to expand its base of members through approaching area businesses or organizations. In addition, they point out that the same advertising will remain expensive as a bank and, if the charter change goes through, the CU will not have the additional good reputation of being a credit union.

"I think trying to sell themselves as a credit union has got to be easier than doing it as a bank," said Pamela, one of Lafayette's government members who didn't want to give her last name.

Lafayette also told members they needed to vote for the charter change in order for the CU to be able to make more business loans, a type of loan which the CU complained was limited by law and difficult to sell since they are generally unique.

"As a federal mutual savings bank we will have at least double our current capacity for making member business loans and we will also remove a number of regulatory restrictions that limit our ability to structure member business loans to be competitive in the marketplace," Lafayette wrote. "Due to our restrictions, we have already turned away a number of good lending opportunities."

But members who had previously been asked about the importance of being able to make member business loans had already expressed skepticism about how important that was to them, an attitude perhaps reflected in Lafayette having only 64 of them on its books.

"If this is something that they say is being done for the good of members," said Scott Stein, a member and USAID employee, "it seems fair to ask how many members are going to need this institution to offer them business loans?" The Branch Wildcard

But the disclosures were also notable for some things that were left out.

For example, the credit union has two branches in federal buildings, one in the headquarters of USAID and the other in the headquarters of the Small Business Administration. The disclosures said that the CU, once a bank, "has no intention of changing existing office locations or hours of service or increasing the pricing on its loan products or service fees, or decreasing the rates paid on deposits as a result of the Charter Change."

But checking with the Small Business Administration has found that making the charter change will mean that the CU will go from paying no rent for its SBA branch to paying some rent.

Mike Stamler, a spokesman for SBA, said that if the CU changes to a for-profit bank it will have to pay rent for the space to the General Services Administration. Stamler could not comment on how much rent the CU might have to pay since the charter change has yet to occur, but a GSA spokesman has said that the agency generally seeks to charge market rates for space it rents in federal buildings.

Stamler also said that there was no guarantee the CU would be able to keep the same space as a bank, noting that the space is conditional on the agency's needs, which are always open to change, whether or not Lafayette remained nonprofit.

As of press time no one from GSA was available to comment on its rental policy at length, but a spokesman for the agency said that it does indeed charge market rates for its space. There are further questions about whether federal regulations will allow the USAID branch to remain at all, but the CU maintains that USAID has already agreed to allow the CU to stay if it should become a bank, but as of press time no one from USAID could confirm.

Credit union members have stated in the past that keeping access to branches near to where they work will be important to their evaluating the charter change proposal. –[email protected]