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News Now

Washington
Mica encourages strengthening not abandoning CU charter
WASHINGTON (1/14/10)--In a recently published letter to the editor of American Banker, Credit Union National Association President/CEO Dan Mica encouraged legislators to support “measures that would further strengthen” the credit union charter, “including alternative capital sources.” Responding to a recent Alan Theriault editorial which recommended “rules that more aggressively promote the conversion of credit unions to banks,” Mica said that “in this environment, credit unions are looking to enhance their charter, not run from it.” Theriault’s suggestion that credit unions abandon their charter “flies in the face of today's economic realities and public sentiment,” Mica added. Additionally, Mica said that current National Credit Union Administration rules permit credit unions to convert to different charters, including those of mutual savings banks, “provided clear and adequate disclosures are made to the credit unions' members.” However, “relatively few of the nation's 8,000 credit unions have opted to convert their charter” in “recent years.” Credit unions are thriving under their charter, in spite of the ongoing economic difficulties, and while Theriault in his editorial indicated that credit union capital is "decimated," Mica noted that the average capital-to-asset ratio for credit unions remains at 10%, “a number many banks would envy.” “Mr. Theriault's advocacy of a bank charter in these times amounts to swimming against the tide,” Mica said, citing public disgust with the behavior of many larger banks and a recently completed CUNA consumer survey which found that the majority of consumers identify credit unions as being more "financially safe and sound" than banks.


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