Group Fighting Conversion Meets Congressman
During a meeting with opponents of DFCU Financial Credit Union's plan to convert to a bank, U.S. Rep. John Dingell (D-MI) expressed concern about the process involved but was otherwise noncommittal, according to the group.
Linda Malec, a spokesperson for DFCU United, said that Rep. Dingell was gracious during a meeting at his Dearborn office, giving a handful of members from her group "half an hour" to explain their concerns about DFCU's tactics to get member support of its plan to become a mutual savings and loan.
Among the things DFCU Owners United discussed with Dingell were DFCU's apparent lack of communication to members, the conflicts of interest involving its supervisory committee, which will become members of the board if the conversion is approved, and the methods planned to garner votes that include cash giveaways, she said.
Dave Adams, president/CEO of the Michigan league, later said that while Dingell did not immediately offer his support to the group, he did express "a lot of concerns about the process" and planned to follow up.
MCUL is not part of the newly formed anti-conversion group, but has its own campaign under way to ensure that members make informed choices about charter changes. In 2004, league officials created a website, www.memberinform.org, after similar tactics were used during Lake Michigan Credit Union's failed conversion attempt.
"We think their process is flawed," Adams said of DFCU. "We think there should be more transparency."
He said that not only has the communication with members been poor, it appears that DFCU officials are on the "fast-track" to getting members to vote before they have all the facts.
Members who attended the credit union's annual meeting said officials told them they were "legally bound" from sharing details about the conversion with members and the media until the NCUA approved the application. That's not true, Malec retorted. In fact, Malec said, she called NCUA's general counsel to find out if such a "gag order" was in place.
"Bob Fenner (NCUA general counsel) told me there is not a rule that prohibits them from talking," she said.
Change of Heart
Apparently, DFCU President Mark Shobe had a change of heart a few days after the annual meeting when he granted telephone interviews with local newspaper reporters.
When one of the reporters asked about the gag order, Shobe said he just felt the media should have the "whole story," a source said.
Shobe's staff still has not responded to repeated requests by The Credit Union Journal to comment about the annual meeting, in particular, about a motion passed recommending the board withdraw their conversion application altogether.
"The motion was passed 70 to 36 in favor of withdrawing the petition," Malec said. "That strongly says that the members don't want this conversion. It is the board's fiduciary duty, particularly as a non-profit, to respond."
Malec said DFCU Owners United plans to notify the NCUA about the board's apparent disregard for the motion that took three counts-voice, hands and count off- before being recorded.
Adams said the motion raised "a huge red flag" to slow down and provide for more member input.
"At the bare minimum, they should take it seriously, communicate with the members about what action was taken and explain why they plan to go forward."