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A group of Community Credit Union members has banded together to oppose the $1.4-billion credit union's proposed conversion to a bank, which would be the largest credit union charter switch ever.

The group is seeking to raise funds to underwrite an advocacy campaign aimed at providing more information to members of Community CU.

The Coalition for Member Trust is headed up by Mark Arnold, a member of CCU and SVP at Neighborhood CU; Elaine Laroa, a member of CCU who works for Texas CU and was formerly with the Texas league, and Joe Arnold, a CCU member who also works for Southwest Corporate FCU. Their involvement is on an individual basis and not as representatives of their employers.

"Someone needs to communicate the full story [of the conversion] to the members, and we're taking that on," Mark Arnold told The Credit Union Journal. "Our group started out as a handful of Community Credit Union members who are passionate about our credit union, and it is growing every day. We have only just begun to get our message out, so we hope to see more members join now that we have crafted our message and begun to get the word out."

But the group's initial attempt to get the word out didn't go smoothly. "We attended Community's annual meeting [last week], and we did talk with some of the other credit union members there, but one of our group was escorted from the building by [a security guard] when she tried to hand out our flyer," Arnold related. "The conversion wasn't even on the agenda. The only reason it was discussed is because some members asked about it. But they treated it like a polling place, and the vote [on the conversion] wasn't even happening. We were told we couldn't distribute any materials within 100 feet of the meeting."

Also at the meeting was Dick Ensweiler, president of the Texas Credit Union League, and CUNA's chairman. "I've been to a lot of credit union annual meetings, and I have never seen that before," he said.

Alan Theriault, a Portland, Maine-based consultant who works with credit unions on charter changes and who has been hired by CCU to help with its conversion attempt, suggested that opposition groups such as the Coalition for Member Trust and the group that successfully stopped the Columbia CU conversion (see related story, page 1), aren't exactly what they seem.

"These groups are usually organized by ex-employees. Credit union leagues tend to have their fingerprints on these type of groups, as well," he said. "A lot of times, it's not that there's a natural groundswell of opposition that bubbles up from the membership when they read the disclosures. It usually goes a whole lot deeper than that. These are often people with their own agendas that don't necessarily have to do with the best interests of the financial institution or the best interests of the members."

But Arnold disagrees.

"I am here as a member of Community Credit Union first, not as senior vice president of Neighborhood Credit Union. In fact, Neighborhood Credit Union stands to gain if Community converts to a bank. It's a whole lot easier to compete with a bank than with another credit union," Arnold responded. "I am passionate about credit unions, and I don't want to lose my credit union. If it takes some 'industry insiders' to start the fire, then we are here to light that fire."

Ensweiler Speaks Out

And pointing out the credit union movement affiliations of people opposing the conversion may actually backfire, noted Ensweiler, who hasn't joined the coalition but did speak out as a CCU member about the conversion at the annual meeting.

"After I spoke, they made a point of noting that I'm the president of the Texas league and the chairman of CUNA," he related. "And that's fine, but all that did was it encouraged people to come up to me after the meeting to ask me about the conversion. Consequently, I was the last one there because so many people wanted me to explain what's happening."

Ensweiler confirmed the league has offered the coalition help with crafting its message and will also help identify other members of Community CU, but it will not offer any funding to the group.

Strict Marching Orders

"We are under strict marching orders from our board to ensure full disclosures, but we will not get involved in funding individual campaigns," he explained. "The members of the coalition are members of the credit union, and they have requested our help as credit union members, so we will help them where we can, but we cannot fund these efforts."

Another credit union luminary also wanted to bend Ensweiler's ear that night: State Employees CU CEO Jim Blaine. Unable to join Community CU due to eligibility requirements, Blaine was not allowed into the meeting, but stood outside waiting for the meeting to end. "He gave me an earful about what more I should be doing to stop this conversion," Ensweiler said. "But who he really needs to work on is (Community CU CEO) Gary Base."

Base could not be reached for comment.

Other groups with credit union ties are apparently also involved. The coalition's website,, was registered by Center for Community Self-Help, which is the sponsor group of Self-Help CU in North Carolina. "It seems there are always people behind these groups who have a higher goal, another agenda," Theriault suggested. "They're not concerned about the credit union itself, but the credit union philsophy and the credit union movement as a whole. That higher goal is not necessarily the goal of the members of this institution."

But the Coalition for Member Trust makes no bones about the fact that it is counting on support from the credit union movement as a whole.

"We do not have the money all on our own to run an advertising campaign, and that is one of the things we want to do," Arnold related. "We are asking for donations from credit union people everywhere to help us fund this fight. This is an uphill battle. Community Credit Union is a billion-dollar institution and has committed $1.2 million to the conversion process. A group of Joe Credit Union Members can't compete with that without some help."

Craig Rhoden, president of Space City CU in Houston, has already pledged $1,000 to the advertising effort. Among the points the group w said it will stress in ads: the loss of ownership and control of the institution, the conversion's effects on rates and fees, and how top executives are expected to profit.

"We received the second set of required disclosures, and once again, credit union members aren't being given a full picture of the conversion," Arnold said. "I support the right for credit union members to vote on the future of the credit union, but the great irony here is that what they're asking members to do is to vote to give up their right to vote in the future."

Theriault pointed out that is not entirely accurate. "Only seven of the credit unions that have converted have (moved to a full stock-issuing institution), and I don't think that's what you're going to see with the (credit unions) we're talking about today. I wish these people would go study the mutual holding company; it's a hybrid structure that safeguards the cooperative structure," he said. "The board is still elected by the members, and although the institution can issue stock, the member-elected board maintains at least 51% controlling interest. It's not the same as a credit union, there are differences, but it is a mutual, cooperative financial institution."

CUJ Resources

For additional info or to make a donation: Coalition for Member Trust, P.O. Box 600613, Dallas, TX 75360-0613.

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