League Says Point of Lawsuit Is To Draw Attention From Real Issue

Register now

Following the lawsuit by DFCU Financial Credit Union against the Michigan league alleging the league was interfering in the CU's effort to convert to a bank, MCUL President Dave Adams issued this statement:

"We have just learned that the DFCU Financial has filed a lawsuit against MCUL for interference, defamation and acting outside the scope of its authority. This is clearly a well-calculated tactic that is used each time one of these conversions takes place. It appears that the credit union is desperately trying to steer away from the real issue, the fact that the members want and deserve a more open, transparent process for addressing the proposed conversion.

"The members, through DFCU Owners United (www.savemycu.com), the National Credit Union Administration and the Michigan Credit Union League have all been encouraging the DFCU Financial Credit Union to take actions to better inform members regarding this proposed conversion. A well-informed membership will then determine whether this credit union will remain a credit union or convert to a mutual savings bank with subsequent stock ownership.

"MCUL's activities have been consistently focused on honest, fair attempts to improve the process for these conversions through communications with regulators and lawmakers who have jurisdiction over these matters. A secondary focus has been the encouragement of a well informed membership. The member group, DFCU Owners United and the general public can rely on the MCUL to provide information regarding the advantages of the credit union charter and the rights of credit union members when these conversions are proposed.

"This legitimate membership group, comprised entirely of current DFCU Financial members, is exercising rights of membership by actively calling on the board to provide answers to their many concerns. It is demeaning to them as current owners of the credit union when DFCU officials accuse the MCUL of driving the opposition to this conversion. We encourage the DFCU officials to listen to their membership and respond. A good example of this is the recent membership vote at the credit union's annual membership meeting on February 15th where the membership voted to have the board of directors withdraw its application for the bank charter conversion. This was not an action of the MCUL. It was a bona fide action of the members at an official membership meeting.

"The MCUL will take this lawsuit seriously and defend its lawful and rightful actions vigorously. However, it is disappointing that the credit union would now, in the face of concern and opposition from its members, file a lawsuit with member funds against an organization with such a pro-consumer position as the MCUL's. The league will not lessen its interest or activities related to improving the conversion process and the need for improved communication with credit union members on such an important issue.

"We also hope that this intentionally publicized lawsuit will finally inform the members that the credit union is contemplating this bank conversion. Hopefully then, the members will be better informed and more likely to carefully read the NCUA-approved disclosures prior to casting a vote.

"The credit unions that comprise the membership of the Michigan league can be certain that the MCUL has operated within policy guidelines set by its board of directors based on member input. These guidelines encourage fact-based statements that encourage process improvements and member education related to credit union-to-bank conversion attempts."

For reprint and licensing requests for this article, click here.
MORE FROM AMERICAN BANKER