Credit Unions Move to Federal Charter

Credit Unions Move to Federal Charter

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SALT LAKE CITY (AP) -- Eight credit unions have switched from state to federal charters, three more have applications pending and about a half dozen others are thinking about it, the president of the Utah League of Credit Unions told a legislative task force.

If the Legislature doesn't fix the state credit union charter, more will follow, ULCU president Scott Simpson said Thursday as the Financial Institutions Task Force held its third meeting

Before the task force had its first meeting, three of the largest credit unions -- Mountain America, America First and Goldenwest -- had received approval to operate under the federal credit union charter.

Claiming a hostile regulatory and legislative environment, five others followed.

Combined, more than $5.2 billion in assets were converted to federal jurisdiction, according to the Department of Financial Institutions.

"We just want to do the best we can for our members. Under the state charter, we can't," Curt Doman, president of Granite Credit Union, told the task force. "I wouldn't change if I didn't have to. I was hopeful that you'd do something. I've been disappointed. Gentlemen and ladies, you've done a bad job, and we're leaving."

The task force, created during the 2003 legislative session, has another year before it will be called upon to report back to the Legislature.

Bank advocates said some credit unions are more like banks than they are like other credit unions, and said they should share he same responsibilities as competitor banks.

Rep. LaVar Christensen, R-Draper, questioned whether credit unions warrant their exemption from paying business income taxes.

"If you've got a $1 billion credit union and however many thousands of members, is there ever a point where it (the definition of credit union) becomes so attenuated that it becomes fiction?" Christensen asked.

He said some credit union board elections were "Saddam Hussein elections" and "dummy elections."

The group took no action and adjourned without setting another date to meet.

(Copyright 2004 by The Associated Press. All Rights Reserved.)

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