DFCU Urges Dismissal Of MemberSuit

Register now

DEARBORN, Mich. - (06/27/06) – DFCU Financial asked a federalcourt Monday that a lawsuit filed last month against the $1.8billion credit union and two board members be dismissed on thegrounds that it lacks any evidence for federal cause of action. Indocuments filed with the U.S. District Court, Eastern District ofMichigan Southern Division, the credit union’s lawyers statedthat any court action in favor of the members’ request for apreliminary injunction requiring a special meeting for the purposeof recalling nine board members would be ‘‘illegal,unsafe and unsound.’’ Longtime members Richard Sly andRaymond Ward filed a lawsuit on May 24 against DFCU Financial andboard members, alleging personal damages as a result of the creditunion’s alleged breach of bylaws to defend their failedconversion to bank, misuse of credit union funds and employees andfailure to provide members access to records related to theproposed conversion attempt. The credit union also stated that themembers’ suit failed to show that they would suffer anyimmediate, irreparable harm should their motion for a preliminaryinjunction be denied. The credit union’s attorneys blame the“influence of outsiders,’’ namely a recentlyformed non-profit, National Center for Member Trust, for theconflict.“DFCU unfortunately has become a pawn in a largerbattle being waged throughout the country and in Congress: How easy(or difficult) should it be for credit unions to convert to otherdepository institution charters?”

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