Members Air Concerns Over CharterConversion
RICHARDSON, Texas - (06/23/05) -- At Community Credit Union's specialmeeting to vote on its proposed conversion to a mutual bank charterheld Tuesday night at the Richardson Civic Center just outsidePlano, critics of the charter change honed in on several themes,including the $1.4-billion CU's continued success under the creditunion charter, the expense of the conversion, the potential forloan rates to rise once CCU is a taxable entity, and the loss ofmembers' equity and control. Many of the speakers were members ofthe Coalition for Credit Union Members originally founded by anumber of industry insiders who are also members of CCU, but therewere a number of speakers who were 'just regular members' with noother credit union industry ties. Other issues included CCU'sdecision to move forward with the vote in the face of NCUA's vow toinvalidate the vote, and the question of what personal financialgain could be available to the board and senior management shouldthe credit union eventually convert from a mutual charter to astock institution. "I just don't see how this benefits themembers," said CCU Member Catherine Butschek. "In fact, everythingI have seen appears to be negative for the members-extra taxes,higher rates, less control. But I do see how the board benefits.You make about $400, $500 a meeting now. Well, you'll make a wholelot more than that once we're a bank. If I wanted to join a bank,I'd have joined a bank." But CCU CEO Gary Base, Chairman JohnMcCartey and Bob Freedman of Silver Freedman & Taff, a CCUattorney, took turns explaining away these concerns, noting that nofuture compensation issues had been discussed as yet, that themutual charter still affords members the right to vote, and that itwould not be feasible to raise loan rates given the competitivemarket. Base also pointed out that the $1.2 million the CUestimated as what it would spend on the conversion was a highestimate in keeping with NCUA requirements, and that the actualcost likely would be closer to $600,000.