Voting Poll Results: Readers Choose Bank Conversions as Top Story of '06
SHREWSBURY, N.J. — Credit unions converting to banks has been a sore subject for many credit union leaders.
Does a conversion go against the credit union philosophy? Have any credit unions that converted really shown a conversion was necessary? Is greed driving conversions? These and other questions are being debated in all corners of the industry. Not surprising, credit unions converting to banks was selected as the top story of the year according to our readers.
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Credit Union Times' online voting poll on the top stories of 2006 netted 860 total votes. Approximately 35% of respondents selected the conversion story.
Interestingly, some stories that garnered a lot of headlines didn't rank high with readers, namely the NCUA data collection pilot. Only 3% of readers selected that as the top story. Industry consolidation, often highlighted at credit union conferences, was also a dud with just 3% of readers choosing it as the top story.
The following is a breakdown of reader selections for the story of the year:
o Credit union-to-bank conversions continue (DFCU Financial, Lafayette, Marcy, Sunshine State, Think)
35.5%
o Centrix goes bankrupt; credit union losses mount
20.35%
o Tough market conditions, tight margins, membership stagnation
13.26%
o Plastic card losses/fraud comes to forefront
8.6%
o Banker attack causes CUs to lose underserved area expansion powers
6.78%
o Nationwide FCU merger with Nationwide Bank
5.7%
o Industry consolidation (leagues, corporates, CUs, vendors)
3.14%
o NCUA Data collection pilot/fallout
3.14%
o Merger of all State Farm FCUs into one
1.86%
o Leagues take on branding efforts (BizKid$, Bob the CU Guy, CCUL branding, etc.) –[email protected] New Voting Poll: Will UBIT Spur State Charters to Move to Federal Charter?
SHREWSBURY, N.J. — The IRS' unrelated business income tax is causing problems for state charter credit unions.
The IRS recently ruled that credit insurance products fall under UBIT. It has also ruled that nonmember ATM fees would be subject to UBIT.
The UBIT Steering Committee, made up of CUNA, CUNA Mutual, the American Association of Credit Union Leagues and NASCUS, are currently working on a legal strategy to challenge the IRS in court. The biggest obstacle right now is finding the ideal plaintiff to bring the suit. Insiders say the perfect credit union would be one with a traditional field of membership, one that doesn't draw significant income from areas the IRS has deemed as UBIT, and is a small or mid-sized credit union.
Currently, UBIT only applies to state charter credit unions. Given the uncertainty of UBIT, could it cause state charters to convert to federal charters? That is the subject of Credit Union Times' latest online voting poll.
The question is as follows:
Do you think UBIT will cause state charter credit unions to convert to the federal charter?
o Yes
o No
o Not sure –[email protected]
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