How Does A Charter Change Affect Credit Union Performance?

Data from Callahan & Associates documents the performance in four key areas for credit unions that have made a charter change over the past decade.


A change from a federal charter to a state charter — or vice versa — can be a viable strategy to revise a credit union’s target member base. Since the beginning of 2014, 54 credit unions have converted from a federal to a state charter, whereas 42 ditched their state charter in favor of operating under federal legislation. 

Every credit union faces its own set of circumstances when deciding whether it’s time to change charters. In the case of St. Cloud Financial Credit Union ($200M, St. Cloud, MN) CEO Jed Meyer believes the pace of change within the financial services industry will only increase in the coming years. For him, converting to a state charter in January 2019 allows the credit union to compete more holistically today while setting up the Gopher State shop for continued success in the future.

“We need to win in the communities in which we operate,” Meyer says. “The moment we don’t win in the community and we’re forced to compete against bigger budgets and virtual services, we’ll be in trouble.” 

For St. Cloud, converting to a state charter will help it extend its field of membership into counties in which it already has high membership penetration. But that’s just one story, one data point. When viewing conversion data in the collective, using the data from the 5300 Call Report and Callahan & Associates’ Peer-to-Peer, certain performance trends start to unfold. 

The next four charts show annual growth rates for credit unions that have changed charters in either direction during the past five years. This growth is superimposed over the number of conversions each year, for reference. An additional five years of historical data is also shown to help track trends.


Dec. 16, 2019


  • explanation in ROA chart seems flawed. MIght want to review the wording.
    chip Filson