Hudson Valley Credit Union has applied to convert from a state to a federal charter, a strategic move aimed at expanding its reach beyond the 13 counties it currently serves in New York’s Hudson River Valley region.

The credit union, which has $8.1 billion in assets and 381,483 members, will require approval from its membership base to finalize the change. A vote is scheduled for September 30, during a special meeting called to consider the charter conversion.

By switching to a federal charter, Hudson Valley would gain broader flexibility in expanding its membership and physical footprint. Unlike state-chartered credit unions, federal credit unions are not subject to state-level branching restrictions and benefit from increasingly flexible federal rules governing their fields of membership.

This could enable Hudson Valley to open new branches and attract members from a wider geographic area.

Federal law and oversight from the National Credit Union Administration provide credit unions with the ability to grow and adapt to member needs across larger communities. On the flip side, proponents of the state charter argue that it keeps oversight at the local level.

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The application follows a significant strategic milestone for the institution.

In February, Hudson Valley completed its acquisition of Catskill Hudson Bancorp Inc., the Monticello-based holding company of Catskill Hudson Bank. The transaction, which was announced in January 2024, marked the first credit union-bank acquisition of that year. Hudson Valley has since worked to integrate the bank’s 7,500 deposit and loan accounts, with full conversion completed in March.

While the credit union has grown through acquisition and is positioning for broader regional presence, its earnings have recently declined. According to NCUA call report data, Hudson Valley earned $4.3 million in the first half of 2025—a 75% drop from the same period a year earlier.

The proposed charter change also comes amid a broader industry consolidation. As of the second quarter of 2025, there were 2,740 federally chartered credit unions and 1,630 state-chartered institutions insured by the NCUA, reflecting a continued decline in the total number of credit unions nationwide.

If approved by members later this month, Hudson Valley’s federal charter could mark a new phase of growth for one of the largest credit unions in New York.

At the same time, credit union-bank deals continue to raise the ire of bankers.

The Independent Community Bankers of America this week released the results of a new data analysis that shows the growth of those deals is harming small businesses and local communities while community banks outperform credit unions in high-poverty areas.

“Lawmakers granted credit unions a full federal tax exemption on the condition they serve defined fields of membership, but years of relaxed policies and mission creep have created conditions that are at odds with the public’s best interest.”

 – Rebeca Romero Rainey
President & CEO
ICBA