The $1.8-billion DFCU Financial Credit Union has announced plans to convert to a mutual savings and loan.
The credit union provided few details in response to press calls other than to confirm its plans. Employees were informed of the decision on the morning of Dec. 14.
"I can say that our board of directors unanimously approved the conversion to a mutual savings and loan institution," said Kim Gabbert, director of public relations at DFCU. "We are excited about the opportunity this will provide DFCU Financial and its members.''
Gabbert said she could not give any other details about the decision-making process or anything else concerning the conversion except that the paperwork had already been filed to start the process.
However, Andy Schor, a spokesperson for the state regulator, the Office of Financial and Insurance Services, told The Credit Union Journal, "We haven't received any official application for a conversion to a state savings bank."
DFCU is the second billion-dollar credit union in Michigan to seek to become a mutual savings bank. The first, Lake Michigan Credit Union, attempted to convert charters but failed to garner the two-thirds approval of voters that is required under Michigan law. In the Lake Michigan CU case, the Michigan league sponsored newspaper advertisements that didn't oppose the merger plans, but did seek to inform members of what would be lost in the event the conversion were to occur.
David Adams, president of the Michigan league, said the league will be watching events surrounding Dearborn Financial CU's conversion attempt.
"We will see how the process plays out to decide whether we will weigh in more aggressively or less aggressively.
"Our position is this: We respect the right of the board officials and the membership to determine the type of charter for the credit union," Adams continued. "We also believe strongly that disclosure should be complete and balanced and that the voting process be fair and void of any gimmicks that would skew the vote." He added, "We will continue to encourage the NCUA to enforce the laws and regulations to ensure a fair and complete process."
Adams said the MCUL will gauge it's level of involvement by the process itself. He said he has every belief that DFCU and its leaders will bring integrity to the process.
As a trade association, Adams said, MCUL will remind CUs and their members about its site, memberinformed.org, which gives the league's perspective on the conversion process and the benefits of being a CU.
Disappointment Expressed
When asked about his personal feelings, Adams said, "I did express to (CEO) Mark (Shobe) personal disappointment that this was an option that he and the board felt they needed to pursue. I hope the outcome is that the members will see the tremendous benefits of the credit union charter. That was the outcome at Lake Michigan CU and we are hopeful that will be the case here."
The $1.75-billion DFCU Financial was founded in 1955 and has almost 160,000 members. It operated as Dearborn Federal Credit Union before changing its name. At midyear it reported 12.11% in net worth.
