Community Charters Bolster CUs by Nearly Six Million Potential Members in August

ALEXANDRIA, Va.-According to NCUA’s Insurance Report of Activity for the month of August, nearly six million potential members were added by credit unions converting to community charters last month. In August, eight credit unions were approved to serve 5,777,203 potential members, the second largest number added in a month by community charters this year. The most potential members added via community charter occurred in July when LA Financial Federal Credit Union was approved for the 10 million-potential member area of Los Angeles County. The largest community charter conversion last month, for Desert Schools Federal Credit Union in Phoenix, encompassed 3.1 million potential members. The $2.1 billion credit union already has nearly one million members. Eight credit unions have been approved for community charters with populations over one million this year, according to the 2004 reports (See chart). Fifty-four credit unions have taken the community charter route so far this year for a total of 37.2 million potential members added. Federal credit unions were also approved to serve 24 underserved areas with nearly 1.7 million potential members. Xerox Federal Credit Union in El Segundo, Calif. captured the largest of these, which was approved for nearly 465,000 potential members in two areas of San Jose, Calif. So far in 2004, credit unions have been approved to serve 139 underserved areas adding 15.3 million new potential members. Southeast Michigan State Employees Federal Credit Union in Southfield, Mich. ($24.5 million in assets) was approved for a TIP charter to serve the state and local governments in Wayne, Oakland, Macomb, Washtenaw, Lenawee, Monroe, St. Clair, or Livingston Counties. The credit union currently has 20,000 members. This is only the 10th TIP charter approved since it was established about a year and a half ago. Another state chartered credit union in Utah opted for the federal charter in August. The $6.2 million Blues Plus Credit Union in Salt Lake City was approved to operate under federal regulations. A large number of credit unions in Utah have made the switch because of the looming threat of taxation. NCUA’s report demonstrated that the merger frenzy continues to wage on. In the month of August, 27 credit union mergers occurred. Among those 27, 12 credit unions under $1 million in assets were merged out of existence. Additionally, 10 credit unions in the $1-$10 million merged, while the remaining five were over $10 million. The assets of the merging credit unions totaled more than $193 million. [email protected]