APPLE VALLEY, Minn. — There were a number of reasons working against Wings Financial including it looking at the possibility of converting to a mutual savings bank, according to Allan Cooper, board chairman of Continental Federal Credit Union.
Because Wings Financial looked at converting to a mutual savings bank it "led us to conclude that the uncertainties and risks involved in this merger are far too great for our membership," Cooper said.
Parish has confirmed in the past, the CU considered a bank conversion. In a Aug. 21, 2006 letter to NCUA, Parish expressed opposition to the then-proposed Part 708a rule, which was subsequently approved Dec. 14, 2006 and ensures members are fully informed of the reasons for a conversion, have adequate time to weigh the pros and cons, and have an opportunity to communicate with one another and share their views with credit union directors.
Parish told NCUA the disclosure requirements "are overreaching and beyond the scope of regulator responsibility" and "force credit unions to provide their members with an imbalanced representation of a proposed charter change while limiting and controlling information." Wings Financial was granted the first nationwide trade, industry and profession charter in 2003, but Parish said the move has had its limitations.
"Although every effort is being made to succeed as an air transportation employee's credit union, we recognize that the current strategy may, at some time due to general lack of marketplace success, regulator challenges, or legislative changes, cause Wings to choose another credit union charter, regulator and/or business model," Parish wrote in the August 2006 letter.
Parish outlined several alternatives Wings Financial had considered including "retracting" to a single community, which was ruled out because it would eliminate growth opportunities outside a single geographic area. The CU was aware that some state regulators may allow retention of previously granted field of membership status while granting a single, large, community FOM–a "somewhat attractive" option, but bogged down by additional regulations, state sales and use tax and other limitations faced by state and federal CUs.
In the end, Parish said there was only one viable option left, he wrote at the time.
"The leadership of Wings is therefore committed to maintaining the Mutual Savings Bank Charter as an exit strategy in the event Wings is unable to succeed as a TIP FOM."
Parish has since told Credit Union Times "there is great value in remaining a credit union. Our board has and will focus on remaining a credit union."
Still, Wings Financial's board had urged NCUA to "recognize marketplace realities and financial institutions' need for alternative business models and charter choice, eliminate the unbalanced boxed language currently required and monitor conversions to assure that members are given full, fair, balanced and factual information."
Wings Financial also suggested NCUA "recognize that all decisions regarding governance and business structure come most appropriately from the duly elected board of a credit union, and those decisions should not be limited by one regulator in an effort to contain its client base; and focus on enhancing the Federal Credit Union charter as a method of maintaining or growing the agency." –msamaad@cutimes.com
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.