SALT LAKE CITY - Members of Beehive Credit Union may have voted to convert to a bank charter, but some are crying foul and vowing to continue scrutinizing what they say are “manipulations.”
According to a statement on the Beehive CU website, approximately 36% of members who were eligible to vote on the proposal voted, with the measure passing, 53% to 47%.
Lori Christian-Chavez, who describes herself as “technically” a member of Beehive CU since 1981 when she inherited a savings account, but “active” since 1988 when she moved all of her banking there, remains convinced the conversion is suspicious. She said she is in the process of moving her assets to another CU.
“I have 15 accounts at Beehive, and have already moved five of them,” she told the Credit Union Journal. “I am moving to [West Jordan, Utah-based] Cyprus Federal Credit Union.”
In some ways, Christian-Chavez said, she was “impressed” the vote was as close as it was. She said the slim margin proved “even with their maneuvering and manipulation, people were not pleased. I was expecting it, because we received some information that 400 accounts were opened in January before the cutoff. We believe those accounts were put in place by Beehive to manipulate the vote. We are asking NCUA to audit those accounts.”
There is no point in staying with her former CU, Christian-Chavez said, because it will not be sufficiently competitive as a bank. She said if she wanted a bank she would choose a large one such as Chase, not Beehive.
Teri Dial, a Beehive member for more than 30 years, told Credit Union Journal she likewise will be moving her accounts to another financial institution. “I think it is unfortunate,” Dial said with a sigh. “It is what it is. It does not bother me personally–there are far too many bad things in this world for it to bother me personally. At the meeting [an event hosted by Beehive on Feb. 13] there were a lot of employees who spoke and I was impressed with their loyalty to Beehive. I sincerely hope it is not misplaced.”
Dial, said membership voting rights are something she admires about CUs.
“It is why we need credit unions–people have the right to vote on their finances and their financial institution. Hopefully, that is what happened: the membership spoke.”
Officials at Beehive did not return numerous phone calls requesting comment for this story. A statement on the soon-to-be-former CU’s website quoted Scott Jorgenson, its president, as saying: “We extend our heartfelt thanks to members who exercised their right to vote and look forward to maximizing convenience and continuing to provide high quality products and services to our members now and into the future.”
Beehive said the charter change will be completed “as soon as practicable” following the receipt of applicable regulatory approval from NCUA, the Office of Thrift Supervision and the FDIC.
Christian-Chavez predicted Beehive will follow the same path many CUs-turned-banks have trod. “They will go to a mutual savings bank, which won’t work, it never has, so then they’ll go to a stock bank and the president and the board will get rich and everybody else will get screwed,” she declared. “I really believe there is some manipulation going on. I find it fascinating Beehive never had 400 people sign up for accounts in one month–except the month before the cutoff.”
According to Christian-Chavez, other aspects of Beehive’s management are questionable. She claimed board member Jeff Foxley is a registered lobbyist for banks, “so having him on the board is a conflict of interest,” she charged.
In addition, she continued, “There are lending issues: the president, executive vice president and board members took out sizable credit lines prior to the conversion. Are they going to draw on those to buy stock later? The whole thing is a mystery to me.”
Asked if she was disappointed by the outcome of the vote, she replied: “Absolutely. It is almost like a death in the family. Beehive has been everything to me. We have 10 kids and four grandkids, and everybody has banked at Beehive. Our business accounts are there, our personal accounts are there; they’ve been there through good times and bad. I almost feel betrayed.
“Even though the vote stands, we aren’t done,” she added. “I don’t believe what transpired was legitimate. Once those mystery accounts are audited, we shall see.”
