Beehive Credit Union is abandoning plans to become a federally chartered mutual bank, despite working nearly two years on the effort.
Beehive said Monday that it will remain a federally insured Utah-chartered credit union.
Scott Jorgensen, Beehive's chief executive officer, said the conversion pullout was due to "unprecedented turmoil in America's economy, especially in the banking arena" and a sense that there is "an extreme reluctance by federal regulators to approve charter applications in this environment."
"Really, the economy has changed so dramatically and the banking world and environment (has changed) during the last year, more than we or anybody anticipated, so that's the primary reason," Jorgensen told the Deseret News on Tuesday.
"I would just say that there have been dramatic changes that have occurred in the regulatory environment and the marketplace, and we're just in unprecedented times that we haven't seen really for generations."
The credit union began work on the conversion in March 2007. In February 2008, 53 percent of voting members endorsed the plan. The credit union's board of directors had the right to withdraw the application at any time.
The mutual-bank structure was attractive to Beehive because its credit-union status limited membership to Salt Lake and Utah counties and certain employee groups. Beehive would have been able to open new branches outside of Salt Lake County and make larger personal and business loans.
In announcing the termination of the conversion, Beehive said it remains "stable and secure." The institution has about 22,000 members and nine branches, including one in Washington County.
"Obviously, because the process took more time than we anticipated, we spent more than we would've liked," Jorgensen said of the amount of time and money spent on the conversion plan. "But we just focus on our members and act in their best interests, and we're continuing to do that now."
Remaining a credit union means the membership and branch-location restrictions remain in place. "We will continue to look for ways to add convenience for our members. We will look for other avenues. Everything we do, we try to do for our members. We're proud of our track record of how we serve them, and we will just continue to work to meet their needs," he said.
Jorgensen did not rule another application in the future, although the credit union would need another membership vote to do that.
"We would only do it if it's in the best interests of the members," he said. "We made a good decision that was in the best interests of our members before, and we feel this is in the best interests of our members right now."
E-mail: bwallace@desnews.com