LINCOLN, Neb. — The erosion of Nebraska state charters issurfacing again as an issue of rising industry concern with thestate-to-federal conversion this month of the $60 million 1stChoice CU of Lincoln changing its name to Peoples Choice FCU.

“We looked at both the pros and cons of charter change anddetermined that there would be savings for us,” explained DaleSpringer, president/CEO of Peoples, which becomes the second CUsince May to make the state-to-federal change.

The Nebraska Credit Union League said the Peoples Choice movereflects a growing worry among the remaining 20 state CUs over thefinancial burden of a state sales and deposit tax as they apply toboth CUs and banks.

“Nebraska is one of only six states' that impose the depositstax on their state chartered credit unions and it simply is lessexpensive to be a federally chartered credit union in Nebraska thanit is to be a state chartered credit union,” said the leagueadding, however, that the trade group “believes strongly in thedual chartering system.”

At the same time “if we do not address the reasons for why ourstate chartered credit unions are converting to a federal charter,we are concerned that this trend will continue to grow,” said theleague.