TUKWILA, Wash.—BECU says it has no plans to become a mutual savings bank, saying it has only sought to promote “strategic options” for credit unions.
As CUToday.info previously reported, the $18.6-billion credit union has asked the state regulator to approve language that would allow it to keep the BECU name should it convert to a cooperative savings bank charter.
“BECU is committed to our members and to being a state-chartered credit union,” said Alison Phelan, director of government affairs for BECU, in an email. “We are not considering becoming a cooperative bank or changing our name. BECU was invited by the Washington State Department of Financial Institutions to participate in a work group to be informed and involved in providing feedback on the Bank Modernization Act, and we provided many areas of feedback on behalf of promoting strategic options for all credit unions. BECU is interested in establishing future options for all credit unions to remain member-owned cooperatives.”
Regulator Explains
As CUToday.info reported earlier, Linda Jekel, director of credit unions at the Washington State Department of Financial Institutions, confirmed to CUToday.info that BECU has asked for language to be added to the state’s banking laws that would allow it to continue operating as BECU–an abbreviation for its official name, Boeing Employees Credit Union–even if it no longer is a credit union and instead a bank.
Noting that BECU is on the state’s Bank Modernization Act project, Jekel said, “One thing BECU would like to see, under the mutual bank charter, is an option to have a cooperative bank charter. And they asked that if they decide to do a cooperative bank charter could they keep their name.”
According to Jekel, under Washington’s law a cooperative bank would operate under regulations for mutual organizations, but the 1.1-million member credit union would be permitted to refer to its charter as a cooperative bank charter.
In a subsequent interview, the regulator "clarified" what Jekel stated to CUToday.info.
"BECU asked the question (about wanting to apply for a cooperative bank charter and keeping the organization's name) in a hypothetical context on behalf of all credit unions, not just BECU," said Lyn Peters, director of communications at the DFI.
Opposition from Trade Group
The Northwest CU Association has taken a stand in opposition to any credit union retaining a name that suggests it remains a CU after it converts to any other kind of charter.
Troy Stang, president of the NWCUA, told CUToday.info the NWCUA believes that "only financial institutions which operate solely under the cooperative principals and under the credit union charter should be able to call themselves a credit union or imply as such.”
BECU was chartered in 1935 with $9 to serve employees of the Boeing Co. The aircraft manufacturer is an enormous employer in the Pacific Northwest, and around the world, and an icon in the region.
BECU is also among the best-known credit union brands in the Pacific Northwest (it also has branches in Spokane, Wash. and South Carolina). The credit union, which employs approximately 2,000 employees, has built a significant advertising campaign around the theme “BECU Own It.”