Members Lose In DFCU FinancialCase
DEARBORN, Mich. - (07/27/06) A federal court ruled thatfederal credit union bylaws are not enforceable and dismissed asuit brought by members of DFCU Financial challenging theboards ill-fated attempt to convert the $1.8 billion creditunion to a mutual savings bank. In delivering his verdict, U.S.Judge Lawrence Zatkoff said allegations of violations of a creditunions bylaws do no amount to a matter of law and threw themembers suit out. Plaintiffs in the instant caseallege no violations of federal law in their complaint, and thusthe claim of federal jurisdiction is facially insubstantial,wrote Judge Zatkoff. Members of the credit union claimed thatdirectors and management violated DFCUs own bylaws when theyrejected a petition urging a special meeting to recall the entireboard of directors. It was the second adverse court decision thisweek against angry members of a would-be credit union convert. OnTuesday, a state appeals court in Washington ruled that dissidentmembers of Columbia CU did not have a valid claim that directors ofthe $700 million credit union violated their fiduciary duty whenthey tried unsuccessfully three years ago to convert that creditunion to mutual savings bank.