The $104 million First Basin Credit Union, formerly known as the Medical Center Credit Union, has submitted disclosure documents to NCUA about possibility converting to a mutual bank, NCUA has confirmed. This would appear to make First Basin the second credit union poised to begin the charter conversion process under NCUA's most recent disclosure and balloting regulations.
First Basin has a community charter to serve two counties in the Odessa area, has just over 22,000 members, and a net worth ratio of 9.26 according to NCUA. It also has a return on assets of 1.61 or over double that of its peer group (0.77).
The credit union has not yet returned phone calls to comment on the charter move. According to the rules adopted by the Texas Credit Union Commission last year, state chartered credit unions which wish to convert to mutual banks must notify their members that they are considering a charter change at least 30 days prior to their board's taking a final vote on the charter change.
Recommended For You
The notifications to members must, among other things, tell members that they have the opportunity to submit written comments about the possible conversion and give them "a clear, concise, and impartial description of the potential conversion to be considered by the board."
The regulations also mandate that First Basin notify the Texas Credit Union Commission that it is considering the charter change at the same time it notifies its members. A source with the Texas Credit Union Commission said that, so far, no formal notification from the CU has arrived though the commission is aware that lawyers with the Washington, D.C. law firm Silver, Freedman & Taff had been working with NCUA on the credit union's behalf.
Silver Freedman & Taff is the law firm that advised the two most recent Texas credit unions that converted to bank charters, the then Community and OmniAmerican credit unions.
If it moves forward with the effort, First Basin will be the first state chartered credit union in Texas to attempt the charter change under the Texas Credit Union Commission's most recent regulation.
Rick Grady, spokesman for the Texas Credit Union League said that League President/CEO Dick Ensweiler has been working with the credit union to try to help them remain in the credit union charter and that the credit union had made the league aware of its struggles.
"The leadership of the credit union has been in communication with Mr. Ensweiler and the league has shared information with them," said Grady. Grady confirmed that the credit union had signaled to the league that it had not made a final decision to convert. –[email protected]
© Touchpoint Markets, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more inforrmation visit Asset & Logo Licensing.
