SALT LAKE CITY — It turns out that a bank charter is not in the future of the $190 million Beehive Credit Union after all.The CU announced its intent to change to a federal mutual bank charter in 2007 and won an approval vote from its membership in early 2008. But, as has happened with other credit unions trying to thread the needle into a bank charter, the application process has kept it from happening-at least for now.According to a Jan. 20 story in the Salt Lake Tribune, credit union CEO Scott Jorgensen cited "turmoil" in the economy, and especially the banking arena, as reasons the CU decided a charter change now would not benefit the CU's members. He also cited "extreme reluctance" among federal regulators to approve the charter change in the current economic and regulatory environment.Had the conversion been approved, the CU-turned-bank's new regulator would have been the Office of Thrift Supervision. The OTS Web site (http://www.ots.treas.gov/) still lists Beehive's application as active, but it also lists the CU's decision due date as Nov. 14, 2008.The credit union had not replied to a request for comment from Credit Union Times on its decision as of press time, and the OTS has a policy of not commenting on charter applications.Problems with regulators have been a familiar theme among some credit unions seeking bank charters. Sunshine State conducted the entire conversion process twice because it had to withdraw its first application after it became clear that federal banking regulators were not going to approve it.Likewise, even before Lafayette Federal Credit Union withdrew its application without revealing a clear result of member balloting, federal regulators had already advised withdrawal until problems with its compliance with the Bank Secrecy Act had been resolved.It appears that the banking regulators and not the NCUA, as pro-conversion critics have often charged, are most responsible for holding up credit union to bank charter changes.Alan Theriault, founder of CU Financial Services, a consultancy that advises credit unions about converting to mutual bank charters, said his firm has begun advising some CU clients to hold off applying for charter conversions right now."I have told several CU clients, after looking at their books and their balance sheets, that they should hold off on making applications to convert their charters-at least right now," Theriault said.He explained that the current economic, banking and regulatory environment has made the FDIC, as the insurer, extremely cautious about taking on new institutions-no matter whether those new institutions are bank startups or conversions from existing charters."The FDIC doesn't want to take on an institution which might have been one of NCUA's problems," Theriault said.–[email protected]