Lafayette FCU: Who Wants to be a Millionaire?

ARLINGTON, Va. – Both Lafayette FCU Chairman Arnold Rosenthal and President Michael Hearne denied during Saturday afternoon’s special meeting on the credit union’s proposed conversion to bank that they were motivated by the millions of dollars in financial benefits that have been paid out to other credit union leaders who turned their institutions into banks. “I’ve been a volunteer for 15 years, why would I change now?” Rosenthal told the tiny gathering. But several members who are work colleagues of Rosenthal’s at the U.S. Small Business Administration, the credit union’s main sponsor group, remembered it differently, saying directors were counting their dollars even before the conversion was presented to members. “Arnie was going around telling everybody he was going to be a millionaire,” said one co-worker at the meeting, who did not want to be identified for fear of reprisal at work. The meeting got off to a rocky start, with Ronsenthal assailing opponents of the conversion as ‘chicken littles,’ prompting some angry members to walk out. “It seems they want to pull the wool over everybody’s eyes,” said Janine Finnell, who voted against the switch to bank, then left. John Gunning, another member who left early after voting ‘no’, said he plans to join another local credit union, Arlington Government Employees FCU, if the conversion goes through. “If I wanted a bank, there are plenty of them,” said Gunning. But, he insisted he will retain a small deposit in Lafayette, in order to qualify for what is expected to be a lucrative IPO soon after the conversion. Rosenthal and Hearne told the members the credit union needed the extra capital from a stock offering after converting to a mutual savings bank in order to expand its market, which, they said is limited by the stagnant growth at Lafayette’s main select groups in the federal government. But neither one explained that NCUA granted the credit union permission three years ago to serve all of the city of Washington, D.C. , as well as the government groups, as an underserved expansion. Fewer than 75 members took the trip, a 45-minute drive to Virginia from Lafayette’s Maryland offices; and officials assiduously prevented the media and other outsiders from attending, having an armed guard remove The Credit Union Journal reporter, then calling local Arlington Police to guard against reentry. Results of the 90-day vote will be announced Monday after all of the mail ballots are counted.