California CUL Adopts Position On Conversions
The Assembly of Delegates of the California Credit Union League has approved a position statement on credit union charter conversions that emphasizes the credit union charter as the charter of choice.
Moreover, the statement stresses that conversions should be approached from the point of view of the members and remain an alternative, especially should the situation change regarding the future relative benefits of a credit union charter compared to other charters.
"It is important for the league to have a position that encourages full disclosure to members and preservation of member interests during conversion considerations, maximizes the value of the credit union charter, and maintains the option for credit unions to convert for business reasons," said David L. Chatfield, president of the California Credit Union League. "We have clear evidence that banker organizations intend to gradually weaken and absorb the credit union system through their stated 'containment and conversion' strategy-to box credit unions in, limit their ability to serve their members, and create an environment that encourages more credit unions to convert over time to bank charters. So, leagues and CUNA should do all they can to resist these efforts to dismantle the credit union system while preserving credit union options."
In its statement, the league said it will also continue to:
* Seek legislative and regulatory changes at both the state and federal level that will make the credit union charter even stronger.
* Work with state and federal regulators to address guidelines that ensure an open and fair voting process.
* Illuminate credit union directors' fiduciary responsibility to protect the members' interests by advocating for disclosures of personal conflicts of interest and consideration of alternative solutions, which might include merger, liquidation, and dividend prior to conversion.
* Seek ways to eliminate any unjust enrichment of insiders in credit union conversions or in subsequent conversions of the thrifts to stock ownership.
* Express fact-based opinions to the media regarding the importance of complete, fair, and balanced disclosures; the avoidance of undue enrichment on the part of any credit union official; and the need for a fair voting and conversion process in order to protect the interests of all members.
* Direct members, the media, and the general public to a central repository of information regarding conversions and their impact on credit union members.