Restrict Expansion For Community-Chartered Credit Unions
By Joyce Moed

WICHITA, Kan.­–Following the signing here of a bill that will restrict expansion for community-chartered credit unions raises the question of if other states should be expecting the same.
"Each state’s situation is different and, frankly, one cannot easily transfer issues between particular states," said Pat Keefe, VP, communications and media outreach for CUNA.

An individual state’s needs concerning field of membership for state-chartered credit unions derives from its current state law and the competitive environment in which its credit unions are operating, Keefe noted. Any state credit union league can, at virtually any time, seek amendments to its state-chartering statute, but it will not do so in absence of a particular need, he said.

"The mere fact that Kansas enacted a new FOM statutory provision does not, in our view, set up other states to do the same or similar things," Keefe said. "Additionally, each state legislature has its own dynamics and its own issues that are significant to it at a given time."

CUNA does not think there are any particular states vulnerable to facing a similar bill to the one in Kansas.

"Kansas’ FOM statutory provisions were somewhat unique, and that was one of the impetuses for their revision," Keefe said.

Jim Blaine, president of State Employees Credit Union in Raleigh, N.C., and member of NASCUS’ Credit Union Executive Council, agreed.

"No, quite certain the Kansas FOM will not become the model for other states," he said. "The great beauty of the state-chartering system is that each individual state creates laws to meet the unique needs of its local financial institutions, its local economy, its local citizenry."

Federal charters provide "one size fits all" conformity, Blaine said, while state charters are tailored to local needs and purposes.

"The states are individually different. That’s our strength," Blane said. "And besides, after the recent NCAA basketball tournament, I can assure you that North Carolina will not look favorably on anything coming out of Kansas."

Gary Peterson, president and CEO of Financial Plus Credit Union in Des Moines, and member of NASCUS’ CU Executive Council, said that anything is possible.

"I think it’s always possible that any bill that’s gotten through somewhere can be adapted and used in other states, he said. "But to say that will be a model they will take and use, I really have no idea," he said.

According to John Smith, administrator for the Kansas Department of Credit Unions, statutes in Kansas become effective July 1, 2008, or when published in the Kansas register.
"SB 535 was passed with the wording ‘ … after publication in the statute book,’" Smith said.