ACB Asks for GAO Study on NCUA Treatment of Conversions
In a letter to Rep. Jeb Hensarling (R-Texas), America’s Community Bankers requested that a GAO study be conducted on the NCUA’s “unwarranted interference” in credit union conversions. Click here to read ACB’s press release on the GAO study request. In his letter to the GAO, Hensarling requested that such an investigation take place, citing “the impression that a bias against credit union conversions may exist at the NCUA…” ACB has been a strong proponent of charter choice and supports the right of a credit union to convert to a mutual bank charter.

Mutual Banker Testifies on Credit Union Tax Exemption
In testimony to the House Ways and Means Committee in November, ACB First Vice Chairman Mark Macomber, president and CEO, Litchfield Bancorp, Litchfield, Conn., presented ACB’s case for the repeal of the credit union tax exemption. He cited the example of mutual institutions losing their tax exemption in 1951 when it was determined that they were in direct competition with banks. Macomber said that the same situation exists today, with credit unions directly competing with banks due to relaxed field of membership requirements and expanded product offerings. Click here to read the full article on the hearing excerpted from the November 7th edition of Washington Perspective.

ACB Provides Guidance on Tax Issues
ACB recently submitted a letter to House Ways and Means Chairman Bill Thomas (R-Calif.) outlining a tax strategy for credit unions. A credit union would retain its tax exemption only if it has assets under $25 million or 75% or more of the income of the credit union consists of income earned from providing loans and deposit services to credit union members of modest means. The letter notes that mutual institutions lost their tax exemption in 1951 because their were becoming more “bank-like” and yet today’s $646 billion credit union industry still maintains its exemption – which will cost taxpayers $7.88 billion dollars through 2009. Click here to read the letter.

Massachusetts Mutuals Examined in Study
The effects of mutual banks converting to stock have been closely examined in a study conducted by Stanley V. Ragalevsky and Sean P. Mahoney of Kirkpatrick & Lockhart Nicholson Graham LLP. The authors used 1982 as a starting point and tracked Massachusetts mutual banks through 2004. They found that more than 84% of the mutuals “that converted to stock form since 1982 no longer exist as independent entities,” while over 75% of banks that remained mutual have survived during that time. The authors cite these findings as evidence for the continued vitality of mutual institutions.

Mark Your Calendars for the 2006 Mutual Community Bank Conference
Mutual Bankers from across the country will gather in Washington, D.C. on March 13, 2006 for a full day of informative discussions and educational sessions on issues directly affecting mutual institutions. Key regulators, lawmakers and their staff are slated to attend. The Mutual Community Bank Conference immediately precedes ACB’s Government Affairs Conference and mutual delegates are encouraged to stay and participate. Registration is complimentary for both conferences. Click here for more information.