Folks Fighting Conversion Allege Mistreatment
During a 90-minute meeting with members of DFCU Financial Credit Union last week, some of the more than 60 people in attendance complained of negative and unprofessional treatment by DFCU employees during attempts to protest the credit union's bid to convert to a bank and to their efforts to gather signatures to recall its board.
Bill Beery, who said he is a 50-year member of DFCU Financial, alleged that an employee at the Livonia, Mich., branch called him a "scum and bum" for picketing and threatened to call police if he didn't stop passing literature out to passersby.
Member Peter Blohm alleged that another employee came out of the Livonia branch and shouted, "Get that big- f#$!#ing-truck out of here" as he pulled into the CU driveway in a white Ford F150 decorated with anti-conversion messages.
Jerry Brandman, COO of DFCU Financial, denied the accusations, telling The Credit Union Journal they are untrue and labeling them "very dangerous" hearsay.
Brandman then added, "I could tell you stories in reverse," but added that there's no reason for anyone to be disrespectful during this process.
At the Oakwood-Beech branch in Dearborn, member Bruce Gearns alleged that DFCU Financial CEO Mark Shobe made a snide comment as he walked passed a member who was signing Gearns' recall petition. Gearns alleged that Shobe remarked, "I guess he doesn't want us to save his money."
"No, he wants you to spend it for him," Gearns said he retorted when the member walked away.
Former DFCU executives Ron Unger and Tom Moylan joined many in the group who expressed their frustration at what they called a secret attempt by DFCU leaders to turn their CU into a for-profit financial institution for personal gain.
"Never in my wildest imagination would I have figured myself to participate in an activity that is so destructive to management," said Moylan, former EVP at DFCU. "But, if I didn't feel it was the right thing to do, I wouldn't do it."
He and Unger, the credit union's former CEO, said that financial records indicate that the DFCU leaders that replaced them suggest they have been planning the conversion for several years and are just now taking steps to make it official.
Unger bravely admitted to a few grumbles during the DFCU Owners United meeting that he handpicked Shobe as his replacement after announcing his own retirement in mid-2000.
"He looked like the best person to replace me," Unger said. "The only negative was that he came from a banking background."
Shobe, referred to by some members at the meeting as "Shoboat," has since been accused of bringing a "banking philosophy" to the credit union.
Unger and Moylan said they have been most disappointed by how Shobe and his board have handled the conversion process.
"This was basically done in complete secrecy until the annual meeting," Unger said. "And while the management and board kept saying they could not say anything until the disclosure statements went out, that really wasn't true."
He said members had every right to know what their CU was planning long before they were ever asked to vote on it. "What's the rush?" he asked.
Unger said during his term at DFCU, his staff and board devised a plan to build a solid foundation with an 8% capital ratio-well-capitalized by NCUA standards-then return excess to members through higher interest rates on savings accounts and lower interest By the time he left, that goal had been met, he said. And, six years later, DFCU is 12% capitalized, but members have yet to see any returns, he said.
"It would be pretty easy for me to make a case that the credit union has been positioning itself to be more attractive to outside investors," Unger said.
Blohm said Unger flew in from his Texas ranch with hopes of meeting with board and supervisory committee members.
"But, we were informed by Mark Shobe that they were not interested in meeting with us," Blohm said. "We have held everything in open forum and we are expecting the same of our credit union."
During a press conference last week to announce success in reaching the 500 names needed on a petition to have the board recalled, Moylan said Shobe told him that CU officials were "embarrassed" by bad publicity and "too angry to meet with us." Officials of the credit union were on hand during the press conference.