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CUs letters debate reasons for conversion attempt
ODESSA, Texas (5/13/08)--Although a recent attempt by a Texas credit union to convert to a mutual savings bank was dropped, a debate on whether a credit union should convert to a bank still lingers in a public forum in the Odessa American. The latest to weigh in on the issue is a small Odessa, Texas-based credit union. Louise Smith, president of $7.3 million asset Permian Basin CU, wrote the letter in the Odessa American's online forum (May 10). The letter responded to a letter published earlier and written by Shem Culpepper, CEO of First Basin CU. The $115 million asset, Odessa-based credit union had planned to convert to a bank before dropping the proposal after a membership group opposed it. Culpepper's letter noted that the credit union cited "harsh business lending restrictions as one of the key reasons for the need to convert" (Odessa American April 19). The credit union's limit on business loans is $16 million while a mutual savings bank limit is $72 million, he wrote. In her response, Smith said First Basin currently has $5.3 million in business loans and has room to grow. It could triple them before hitting the cap. First Basin grew 13% in assets during first quarter 2008, she said, adding that at that rate, the credit union could add $7 million a year in business loans to its portfolio. "Credit unions serve a vital purpose in our community, which is very different than that of a bank," said Smith, adding that one need only to look at credit unions to see pioneering spirit. For the complete letters, use the resource links.
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