The 70,000-member, $1.6 billion Technology Credit Union has quoted NCUA board chairman Debbie Matz in the materials it has provided members to get them to approve a change from a credit union to bank charter.
In a section of the conversion notice addressing member business lending, the credit union said its board found it prudent to address the need to make more business loans before the San Jose, Calif., credit union approached the mandated cap.
It quoted Matz' testimony before the Senate Committee on Banking, Housing and Urban Affairs on June 16, 2011.
"As noted by NCUA Chairman Debbie Matz in her statement….regarding the member business lending cap '(W)ith the (member business lending) cap, it is difficult to achieve the necessary economies of scale in terms of personnel and systems to make this type of program cost effective,'" the credit union wrote.
Technology also cited Matz from the same hearing saying the member business lending cap "limits credit unions' abilities to diversify their loan portfolios."
As of the end of March 2012, the credit union reported $88 million or between 5% and 6% of assets in member business loans.
But retired quality control manager Robert Marinace, a member of Technology since 1978, expressed skepticism about member business lending being enough of a reason to stop being a credit union.
The 84-year-old member said he suspected the desire among credit union insiders to reap a windfall from issuing stock as a bank was largely responsible for the credit union's enthusiasm for the charter change, even though the credit union has said it does not plan, as of now, to issue stock as a bank.
"There is an awful lot of money, millions of dollars, which can be made from this," he said.
The credit union has sent out the first of three rounds of materials about the charter conversion and is offering a raffle to induce members to participate in the balloting.
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