DFCU Faces Down Dissidents

Register now

DEARBORN, Mich. - (05/10/06) – The Board of DCU Financial saidWednesday it won’t subject itself to a special meeting toallow members to vote on its recall, saying it would violateprovisions of the Federal CU Act. The $1.8 billion credit unionsaid they believe a recall of the nine directors could violate thelaw by reducing the number of directors below the federallymandated five directors. In addition, although NCUA notified themthe supervisory committee would then serve as the Board in theevent of a recall, there is no statutory authority allowing thesupervisory committee to serve, they said. “We also believethat a proposal as extreme as the removal of the entire Board ofDirectors, in addition to being legally invalid, is plainlycontrary to the best interests of DFCU’s members, which yourdirectors have the responsibility to protect,” the creditunion said. More than 1,700 members of the credit union giant havesigned a petition asking for a special meeting to vote on therecall of the nine directors who voted for the ill-fated conversionof the credit union to mutual savings bank. A congressionalcommittee is scheduled to hold hearings Thursday on the controversybrewing over credit union conversions.

For reprint and licensing requests for this article, click here.
MORE FROM AMERICAN BANKER