LINCOLN, Neb. — The erosion of Nebraska state charters is surfacing again as an issue of rising industry concern with the state-to-federal conversion this month of the $60 million 1st Choice CU of Lincoln changing its name to Peoples Choice FCU.

“We looked at both the pros and cons of charter change and determined that there would be savings for us,” explained Dale Springer, president/CEO of Peoples, which becomes the second CU since May to make the state-to-federal change.

The Nebraska Credit Union League said the Peoples Choice move reflects a growing worry among the remaining 20 state CUs over the financial burden of a state sales and deposit tax as they apply to both CUs and banks.

“Nebraska is one of only six states' that impose the deposits tax on their state chartered credit unions and it simply is less expensive to be a federally chartered credit union in Nebraska than it is to be a state chartered credit union,” said the league adding, however, that the trade group “believes strongly in the dual chartering system.”

At the same time “if we do not address the reasons for why our state chartered credit unions are converting to a federal charter, we are concerned that this trend will continue to grow,” said the league.