In an unusual move, BUCS Federal Credit Union has applied with a federal regulator to become a savings and loan.
The Owings Mills-based credit union filed an application with the savings and loan industry's regulator, the Washington-based Office of Thrift Supervision, to become a mutually owned thrift.
BUCS Federal would become only the third credit union to drop its charter and convert to a thrift, officials with the government and the credit union said.
Herbert J. Moltzan, BUCS' president and CEO, said board members agreed to the switch because credit unions are bound by laws that restrict expansion.
"Our credit union is sort of stymied; we need to expand to grow," Moltzan said.
"This gives us the option to open up and take in people from the community."
BUCS Federal has $54 million in assets and it provides banking services to a number of health care firms including, Blue Cross Blue Shield of Maryland and HelixHealth.
Moltzan said he doesn't plan to expand quickly if the conversion is approved.
"We are going to operate with all the same philosophies as a credit union," he said. "We don't want to be a NationsBank."
Bankers have long complained that credit unions have had an unfair advantage because they don't pay taxes on their net income since they are nonprofit organizations.
BUCS will give up its tax-free status, and Moltzan estimates it will pay $100,000 a year in taxes once it becomes a thrift.
Moltzan expects the credit union to receive approval in June, but the first hurdle is getting a majority of its depositors to approve the conversion.
Pub Date: 3/26/97