There have been plenty of legal bumps along the way before the$240 million American 1 FCU can complete the mergers of twostruggling Detroit- area counterparts, the Jackson, Mich., CU saidFriday.

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As part of the deal, American 1 is switching to a state charterto accommodate field-of-membership hurdles in connection with nextmonth's takeover of the $10.9 million Michigan Services CU ofSouthfield, the credit union announced Thursday.

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Earlier in the week American 1 formally effected a merger of theailing $55 million Premier Financial CU of Detroit.

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In a statement issued by David Puckett, American 1president/CEO, the central Michigan CU said the NCUA last May hadturned down its application to merge Michigan Services apparentlybased on FOM rules governing community-chartered CUs consolidatingwith occupational CUs “except in an emergency situation.”

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Despite its 2010 losses, Michigan Services CU was not consideredan “emergency” case, said American 1.

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“Because both credit unions still felt that this would be a goodpartnership for their membership, the American 1 board of directorsresearched” the merger issue and decided on converting to a statecharter, American 1 said in the statement.

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But eight years ago when Michigan codified its CU law, theAmerican 1 board decided that “the state of Michigan providesa friendly business environment for credit unions” allowingAmerican 1 more opportunities for partnerships with healthy creditunions in the future. In the state of Michigan, approximately2/3 of credit unions are state chartered.”

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American 1 with 11 branches is now “excited to be growing intonew communities throughout Michigan” and would explore other mergeropportunities with other like-minded CUs in the state, the creditunion's Friday statement said.

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