Four Federal Credit Unions Switch to State Charters

Both Oregon and Connecticut saw several large credit unions switch from federal charters to state charters at the end of 2014.

In Oregon, $914 million Rogue Credit Union in Medford and $885 million Oregon State Credit Union in Corvallis converted from federal to state charters on January 1. (See story in CU Times).

As a state chartered credit union, Oregon State Credit Union will serve anyone who lives or works in 24 western and central Oregon counties.

In Connecticut, American Eagle Federal Credit Union in East Hartford converted from a federal credit union to a Connecticut credit union. The $1.3 billion credit union will be known as American Eagle Financial Credit Union, Inc. with a proposed field of membership consisting of: persons who live, work, worship, or attend school in, and businesses and other legal entities located in Harford County, Middlesex County, Tolland County, or New Haven County, Connecticut; and, also included are spouses of persons who died while within the field of membership of this credit union, volunteers in the community, employees of this credit union, organizations of such persons, and members of the immediate family or household of such persons, volunteers or employees.

Also, Nutmeg State Federal Credit Union in Rocky Hill switched from a federal credit union to a Connecticut credit union. The $368 million credit union will be known as Nutmeg State Financial Credit Union, Inc. The proposed field of membership will consist of: persons who live, work, worship, or attend school in, and businesses and other legal entities located in Harford County, Middlesex County, Tolland County, or New Haven County, Connecticut; and, also included are spouses of persons who died while within the field of membership of this credit union, volunteers in the community, employees of this credit union, organizations of such persons, and members of the immediate family or household of such persons, volunteers or employees.

Clearly, the two Connecticut credit unions viewed that being granted an expansive community charter was worth the price of complying with the community reinvestment act.

Moreover, since these credit unions' fields of membership are broader than what is permissible at the federal level, Oregon and Connecticut lawmakers should view this as an opportunity to re-evaluate the state's tax treatment of these institutions.