The group of members seeking to oust the board at DFCU Financial Credit Union was still discussing its options as The Credit Union Journal was going to press, even as other groups and credit unions have pledged financial assistance should the group choose to pursue litigation.
The group, DFCU Owners United, had succeeded in collecting sufficient signatures to force a special meeting at which a recall of the board would be put to a vote, but the board of DFCU Financial has said it will not hold the meeting. The credit union had previously announced plans to convert to a mutual savings bank charter, but opposition from DFCU Owners United and others led it to drop those plans.
At press time, DFCU Owners United spokeswoman Margaret Blohm said her group was still discussing its options, and expected to launch a campaign next week for financial support.
"To continue the democratic process on behalf of DFCU Financial's members, we are going to need additional resources," Blohm told The Credit Union Journal. "We need more money from credit unions and more money from members."
Blohm said she suspected that many members were still unaware that their credit union has decided not to hold the special meeting, despite its own bylaws that require it. The deadline to hold that special meeting was Thursday, May 18.
DFCU CEO Mark Shobe and Board Chairman Harold Lowman initially announced their decision via a letter posted on their website, www.savedfcu.com on May 10. Blohm said she just received a copy of that same letter on May 17.
DFCU Owners United had hoped the National Credit Union Administration would step in to enforce the credit union's bylaws, but the federal agency has said it will not intervene, saying this is a matter between the credit union and its members.
Blohm said many members and several credit unions have promised financial commitments to help protect their rights as member-owners of the $1.8-billion CU, but so far, no money had come in.
The National Center for Member Trust, an organization created by GTE FCU CEO Bucky Sebastian and State Employees CU CEO Jim Blaine, is one of the groups that has pledged financial assistance to DFCU Owners United.
"We continue to be supportive of DFCU Owners United," Sebastian said. "As long as they are continuing to pursue reasonable and straightforward remedies for this situation, we will support them. We will help finance that effort."
Sebastian told The Credit Union Journal the NCMT was still awaiting word from DFCU Owners United on what the members' group's next step would be. One option would be to file a lawsuit against the credit union for breaching its own bylaws, and NCMT stands ready to help fund such an effort, if the members' group should choose to pursue that.
'Truly Unbelievable'
"It is truly unbelievable what [DFCU Financial] is doing. I don't think anyone ever envisioned a credit union going against its own bylaws. I don't believe anyone has ever had to sue a credit union for not following its own bylaws," he commented. "But then again, I don't think anyone envisioned credit union conversions like this, which is why the law [ruling conversions] wasn't particularly well thought out."
Sebastian said the inspiration behind the creation of NCMT was the conversion of both Community CU, Plano, Texas, and OmniAmerican CU, Fort Worth, Texas to mutual bank charters, despite organized member opposition to the Community CU conversion.
"We saw the lack of resources available during the Community Credit Union conversion and the fraudulent statements that were being made," Sebastian related. "None of the trade groups got involved, and by the time the members' group go together and got organized, the majority of votes were already in, and it didn't matter."
