WICHITA, Kan. — The restrictive and banker-sponsored field of membership bill, up for a favorable vote in the Kansas House today, has long generated thoughts of Utah-type conversions to federal charters, CEOs of Kansas CUs said Thursday.
“Taken by itself, I'm not sure that would push me over but of course when you take a look at the department's changes on the IRS 990 report, then I consider it another arrow taken away from the state charter,” commented James Holt, president/CEO of the $125 million Mid American Credit Union, here making reference to UBIT and policy pronouncements by the Kansas Department of Credit Unions.
Holt, the former president/CEO of the Colorado/Wyoming Credit Union League and whose CU is one of nine identified as most directly affected once the FOM/merger bill is enacted possibly in weeks, said many of his peers are in a wait-and-see mode to gauge what kind of rules are adopted in implementation of the law which he described as a “very unfriendly blow to consumers.”
Meanwhile, Erich Schaefer, chairman of the Kansas Credit Union Association, which reluctantly agreed to the so-called compromise FOM bill, said he, too has “looked at the federal charter” but it might not be practical to make a switch for his rural western Kansas CU, the $212 million Golden Plains CU of Garden City.
In agreeing to the compromise which sources said may prevent banker-inspired lawsuits, the KCUA officially said this week the FOM bill, as finally written, while harmful to consumers in limiting “choice” is workable for CUs and that “we believe it will continue to provide Kansas state-chartered credit unions with a unique and more flexible field of membership option than a federal charter.”
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