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New York Passes a New Credit Union-to-Bank Conversion Law

ALBANY, N.Y. - Beginning on January 1, 2005, a state-chartered credit union in New York State will be able to convert to a state-chartered mutual bank without the approval of the state of New York's Banking Department, according to a new law that was passed by the state legislature in...

By David Morrison | Updated on November 16, 2004

ALBANY, N.Y. – Beginning on January 1, 2005, a state-chartered credit union in New York State will be able to convert to a state-chartered mutual bank without the approval of the state of New York’s Banking Department, according to a new law that was passed by the state legislature in late October and signed into law recently. The state previously had no law explicitly allowing or forbidding state-chartered credit unions from converting to state-chartered mutual banks, and the legislation suggested this unfairly burdened the state charter. Amy Kramer, vice president of government affairs for the New York Credit Union League, explained that the league had not taken a position on the legislation. “We have limited resources,” Kramer said. “We made sure legislators knew what NCUA is doing on the issue and any federally insured credit union is going to have to comply with NCUA regulations anyway.” Michael Lanotte, general counsel for the league pointed out as well that all of New York’s state-chartered credit unions have NCUSIF insurance and thus would have to comply with NCUA’s conversion regulations. Neither he nor Kramer would speculate on why New York banking groups, particularly the Community Bankers Association of New York State pushed as hard as they did for the legislation. Lanotte said that none of New York’s state-chartered credit unions have signaled an interest in converting charters and no one was available from CBANYS to take questions before press time. As of 2003, the last year NASCUS collected data, 21 states across the country have laws that allow state-chartered credit unions to change charters to state-chartered mutual banks, 23 have laws that do not allow it, and six either take no position on the question or do not have a credit union law. [email protected]

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