Group Opposing Conversion Retains Law Firm, Gathers Funds
The leaders of DFCU Owners United, a group opposing the proposed conversion by DFCU Financial Credit Union to a bank, said it has retained legal counsel to represent the members' interests.
Margaret Blohm, spokesperson for DFCU Owners United, said the law offices of Raymond & Prokop, P.C., Southfield, Mich., have sent a letter to DFCU Financial officials demanding answers to specific questions about the due-diligence that has been conducted related to the conversion and requesting a copy of the bylaws.
"We want to know what they did to start the process," Blohm told a group of approximately 65 people who met last week, expressing her own frustration about the apparent lack of consideration given to members even before the announcement to convert was made in mid-December.
The public gathering in the basement of a local church grew heated as members fired remarks toward Kim Gabbert, director of Public Relations at DFCU Financial, as she spoke about the "highly regulated process" that she said kept the credit union from disclosing information to members. Gabbert said that all of the members' questions would be answered in the disclosure packets they will receive in the mail, probably by the end of the month.
Opponents of the plan expressed strong objections that the packets will likely contain chances at cash prizes in exchange for voting ballots, which will also be enclosed.
Gabbert also said a "special meeting" will be held on the final voting day, 90 days from kick-off. The conversion needs a simple majority of voting members to pass.
"To pursue a course of action of this magnitude should have taken a vote of the members before filing plans with the NCUA," said one member.
Some members called DFCU Financial's tactics a "smoke and mirrors" attempt to become a bank for the leaders' own personal gain. Many said they wanted to know why the CU was being so tight-lipped about how the conversion will impact the members. "There's not a lot of information we can give you at this time because we don't have a lot of information," Blohm told the crowd. "We've received no specific answers to the questions we've asked."
Blohm said that she and others have sent numerous letters-some certified-to DFCU officials, board members and supervisory committee members asking specific questions about how the conversion will benefit members, but have received nothing more than form-letter responses.
When asked directly and repeatedly about the lack of information being made available, Gabbert said the NCUA was to blame.
"This is a highly regulated government procedure," Gabbert said, amid interruptions and grumblings from audience members. "It appears that we are not disclosing information but there are some answers we can't give yet. Your real beef should be with the NCUA. It's a rigid process and we are doing our best to follow this process."
While some audience members said they accepted the fact that written communications were restricted, one member said, "That does not restrict other forms of communication. You can certainly answer some simple questions."
Gabbert's explanation that the struggling economy in Southeastern Michigan was an indicator that the CU had to make this move to protect it from becoming another company "in a rut like Northwest" Airlines did not go over well.
"Number one, the credit union is not a company," shouted one audience member. "The risk is that it could become like Northwest if it does turn into a bank...This is a railroad attempt."
Several audience members said they planned to organize a picket line outside the main branch about the conversion.
Blohm said the public gathering was called to secure donations and volunteers to help spread the word about how the conversion will impact their services and rights.
Among those who stepped up with donations was Dearborn Village Community Credit Union. DVCCU, with $17 million in assets, is the smallest community-chartered credit union in the Dearborn area. DFCU Financial is the largest.
"We would gain members from this conversion, but we think it's more important that we oppose the process," said John Tanner, board VP of DVCCU. "It's kind of like they betrayed the CU movement."
"And the members," added Terry Denmark, CEO of DVCCU, who presented DFCU Owners United with a $500 donation. "When we received a letter asking for our support, it didn't take but a heartbeat to say yes," Denmark told the audience. "We need to do what's right for the industry."
Audience members also gave donations in exchange for yard signs and bumper stickers proclaiming "Don't Make Our Credit Union A Bank!" with a link to www.savemycu.com.