Credit Union Conversions Continue to Make Headlines
Recent events involving a Michigan credit union seeking to convert to a mutual bank have prompted a series of opinion pieces and letters in the American Banker. The Washington Post also published a story on conversions. The Dearborn, Mich. credit union, DFCU, may have to negotiate an NCUA roadblock in its efforts to convert to a mutual savings bank. NCUA Region I Director Mark Treichel has written a letter to the attorneys of DFCU, a $1.8 billion asset credit union, citing three areas of concern in the proposed disclosure materials. If the credit union proceeds without making changes, the NCUA could move to invalidate the vote. ACB has been very critical of the NCUA’s efforts to forestall charter choice among credit unions. ACB believes that if a credit union can better serve its customers as a mutual savings bank, then it should be allowed to convert without unwarranted agency interference.

FASB’s Exposure Draft Draws Attention of Assistant Treasury Secretary
In remarks made on February 28th during the Credit Union National Association’s Government Affairs Conference, Assistant Treasury Secretary Emil Henry acknowledged the fact that FASB’s new rules for business combinations would require a credit union to use the purchase method when acquiring another credit union. Adding that he supported “a targeted fix of this problem.” ACB has long been involved with this issue, arguing against FASB’s proposed elimination of the pooling of interests method of accounting for mergers or combination of mutual institutions, including credit unions. However, we also believe that all mutual institutions, including credit unions, should play by the same accounting rules. As the Exposure Draft applies to all cooperatives, then no exception should be made for credit union combinations or mergers.

Article Notes MHC Conversion Slowdown
In an American Banker story, the recent slowdown in mutual holding company conversions was explored. Although there were 13 MHC conversions in 2005, just three occurred after July 15 and only a small number are in the works. Industry analysts speculated that investors have become more wary as the stock prices of some recently converted mutuals have been stagnant. Higher appraisal values were also blamed, as were rising interest rates which may affect the mortgage market and decrease the demand for capital.

Don’t Miss the 2006 Mutual Community Bank Conference
It’s not too late to sign up for ACB’s Mutual Community Bank Conference! Nearly 100 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.

ACB has put together a program that includes a discussion of innovative mutual organizations, succession planning, community involvement, mutual holding companies and corporate governance. Facilitated peer group discussions begin the day and the conference concludes with a meeting of ACB’s Mutual Institutions Committee.

Directly following the Mutual Community Bank Conference, ACB’s Mutual Institutions Committee will meet at 4:30 p.m. The committee is slated to cover a variety of topics and will receive an update of the legislative and regulatory issues that affect mutual banks. Mutual bankers are encouraged to get involved and participate in the committee meeting. For more details, please contact [email protected].

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.