It should be no surprise to anyone that a recent Credit Union Times Web site poll about the "Story of the Year in 2006″ identified the top story to be the continuing conversion of credit unions to the mutual savings bank charter. The compelling reasons for charter conversions–access to additional capital, no field of membership restrictions, and increased lending authorities–will keep this story in the headlines throughout 2007 as well. Here are some predictions about what to expect in the year ahead:
oMarcy FCU, Sunshine State CU and Think FCU will successfully convert to the mutual savings bank charter.
oAt least five and as many as 15 more credit unions will announce plans to convert to the mutual savings bank charter.
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oHundreds of credit union boards of directors will discuss the mutual savings bank charter option for the first time during their strategic planning sessions. oAnother hybrid conversion/merger like that of Nationwide FCU and Nationwide Bank, FSB will be announced. oA handful of banks will make unsolicited merger offers to selected credit unions that will include pre-merger payouts to credit union members. oNCUA's new conversion regulations will be challenged in court and ruled to be overreaching and beyond the scope of the agency's legal authority. oThere will be a growing concern in Congress, based upon the new conversion regulations and the recent GAO investigation of the NCUA Board's independence, that the credit union industry trade associations overly influenced the agency to impede conversions. oThe NCUA Board will have an epiphany and finally realize that the anachronistic standard federal credit union bylaw provisions governing special membership meetings to recall credit union boards of directors inherently cause reputation risk and endanger the National Credit Union Share Insurance Fund. oBankers associations will cause the introduction of legislation in the 110th Congress mandating that all nontraditional, bank-like credit unions must convert to the mutual savings bank charter.
oThe mandatory conversion legislation will face off against a newly introduced Credit Union Regulatory Improvements Act, creating a deadlock in which neither bill progresses.
oAn increasing number of leaders from larger credit unions will admonish their trade associations for spending too many resources–both financial and political–on attempting to derail a handful of conversions, rather than investing those resources to improve the credit union charter.
oA converting credit union will successfully sue a state credit union trade association for defamation and interference with its membership vote.
oCredit union conversions will see increasing outside scrutiny from Washington think tanks and similar public policy organizations, adding new voices other than those from within the credit union industry, to the conversion debate.
When it comes to credit union conversions to the mutual savings bank charter, 2007 will be an evolutionary year; it may even be a revolutionary year. Marvin Umholtz President/CEO Umholtz Strategic Planning & Consulting Services Castle Rock, Colo. (Editor's Note: Umholtz is associated with the Coalition for Credit Union Charter Options, which openly advocates for credit unions converting to banks.)
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