ODESSA, Texas -
In the win column, First Basin CU, a $110-million credit union here, decided to suspend its member vote to convert, citing irregularities in the voting, just days before a special meeting was supposed to culminate the 90-day ballot.
But a few days later, Beehive CU, a $175-million credit union in Salt Lake City, said its members had approved the charter switch.
Officials at First Basin CU did not return phone calls last week, but sent a letter to members announcing the suspension of the vote while they investigate allegations that members were receiving phone calls claiming they would lose their deposits and their accounts would be closed if they didn’t vote against the conversion.
“We are also aware of numerous other false statements being circulated by opponents of the conversion proposal, such as rates and fees are going to get worse for members and members will not be able to get loans from First Basin after the conversion,” said the letter, signed by the credit union’s CEO, Shem Culpepper.
In light of the situation, Culpepper said the board will now consider whether it can return some of the credit union’s equity as a special dividend.
Opponents of the conversion scoffed at the allegations and suggested the vote was suspended because management was keeping a running tally of the member ballot and was losing the vote.
Letty Moreno, a former First Basin employee who heads Save First Basin, a member group opposed to the conversion, said members felt the suspension of the conversion ballot just days before the 90-day vote was scheduled to culminate in a special meeting was suspicious. “We speculate they (the board) were probably losing,” she stated.
She wondered why the credit union board is only now exploring a return of some of the equity, a popular course for credit unions, and never suggested a payout before launching the conversion. “We feel the credit union board does not represent the best interests of the credit union,” said Moreno, who called on First Basin to make the vote count public.
At Beehive CU, members approved the conversion by a 54% to 47% margin, according to the credit union, with 36% of the credit union’s 22,000 eligible members voting in the 90-day ballot. That works out to a margin of 550 votes.
The vote must still be ratified by NCUA, which has 30 days to rule on the ballot.
The recall of a board after a failed conversion to savings bank has been tried three times in recent years, all unsuccessfully.
In the case of Lafayette FCU, in suburban Washington, D.C., which suspended its bid to convert after it was disclosed the completed vote was tainted, the board successfully fought in court to defeat a member recall petition.
At DFCU Financial in Dearborn, Mich., the board also successfully fought in court to defeat a member recall after withdrawing a bid to convert to mutual savings bank.
And at Columbia CU, in Vancouver, Wash., the board narrowly escaped a member recall during a special meeting attended by thousands of credit union members after the abandonment of a conversion.
There are two other credit unions in the process of converting to mutual savings banks: First Priority CU in Boston, and Community CU of Lynn (Mass.).
