KENSINGTON, Md. — Members of the $332 million Lafayette Federal Credit Union who oppose the credit union's proposed conversion to a mutual bank have written an eight-page letter to the credit union's board of directors which questions, among other things, the CU's contention that it would enjoy a "more flexible regulatory environment" as a bank than as a CU.

Existing federal regulations allow a federal credit union to have free office space and other support and do not offer the same benefits to for-profit banks, the members pointed out in their Oct. 3 letter. Then they noted that the Office of Thrift Supervision, which would be the CU's regulator should it change charters, actually regulates the process of opening new branches more than NCUA does.

"In contrast to the regulatory flexibility of an FCU, before a federal savings bank can change the location of or establish a new branch office, it must file an application or notice with the Office of Thrift Supervision and receive OTS approval or nonobjection," the members wrote. "This approval process is quite extensive. Also, unlike FCUs, federal savings banks must follow notice procedures prior to closing any branch office."