Members Protest At Branches, Now Seeking To Oust DFCU Board
Following three-days of anti-conversion protests at three DFCU Financial branches last weekend, members of DFCU Owners United announced plans to step up their efforts with radio advertisements, more newspaper ads and a petition drive to remove all nine board members.
During a standing-room-only meeting at the Livonia Civic Center on April 4, about 60 people spent two hours discussing the $1.8-billion DFCU Financial's campaign to convert to a mutual savings bank and how it would effect them.
"We are not just a small group of dissident members," said Linda Malec, DFCU Owners United spokesperson. "We represent 160,000 plus members who will be disenfranchised if we don't raise our voices."
Malec, former DFCU board chairman and DFCU Owners United spokesperson, urged the audience to carefully read the disclosure information mailed to them last week and pay special attention to details about stock options, compensation, taxes and member rights.
"Query it, study it, ask questions about it," Malec said. "They say they need to grow, they have to grow, the world is falling apart... Well, this is the third healthiest credit union in the country. And not-for-profits aren't supposed to grow a mega-size."
Marvin C. Umholtz, membership director of Coalition for Credit Union Charter Options, stood just outside the meeting room apparently taking notes as he listened through the closed door. Malec said Umholtz, who during his career worked for the Michigan league, flew in from Colorado uninvited with the hopes of addressing the group, but was denied entrance into the meeting.
"He said he didn't come here to be ignored," announced one member who stepped outside of the meeting room to ask Umholtz who paid for his trip and why was he there.
Malec said Umholtz had sent several e-mails directly to her asking for an opportunity to "tell us how mutual savings banks are a good deal." When she did not respond, Malec said, "He sent me a really nasty letter telling me that I wasn't being open."
Calling On The Grassroots
With support for DFCU Owners United growing and $34,000 in financial support from 26 credit unions and 33 individuals, thus far, the group has confidence that its grassroots efforts will prevail, Malec said.
"In 1998, there were 6,000 of us on the steps of Washington, D.C. to pass a bill that no one thought we could pass to preserve credit unions," Malec said, referring to H.R. 1151. "We're here tonight to do it again, this time for our own credit union."
She said a second round of local newspaper ads were set to appear the following day that included a long list of anti-conversion supporters, including Ron Unger, former CEO of DFCU Financial, along with many former volunteers and employees.
The meeting also marked the start of a petition drive to collect the 500 signatures it will need to force a special meeting and a vote to remove board members.
"We want to have that special meeting before the June 21 vote (on the conversion)," she said. "And, while we only need 500 signatures from primary members, we'd like to have 1,000 or more...by next week."
The petition, she said, was triggered after repeated, unsuccessful attempts by several members to inspect board minutes, reports, studies, graphical presentations and other documents pertaining to the conversion.
"Except for limited inspection of the minutes, the request was summarily denied," Malec said, explaining that documents provided to DFCU members last Friday had been edited.
Three members along with a DFCU Owners United attorney were allowed to view the minutes and take notes from those materials while DFCU's in-house counsel and chief financial officer stood watch.
But, Malec, along with DFCU Owners United spokesperson Margaret Blohm, pointed out that none of the minutes were signed and, while numbered consecutively, several meetings between January 2002 when the idea of converting was first proposed, and October 2004 when the board brought in a conversion consultant, were missing.
"When I was on the board we had to sign and file everything," Malec added. "And the meetings were tape recorded and transcribed. I guess they don't do that anymore."
When member Lori Russell asked DFCU officials if she could take copies of the documents out of the credit union, they said she would have to sign a "non-disclosure statement," meaning she could not discuss the contents with anybody.
Many in attendance shared their own frustrations about the lack of information being provided to them by credit union leaders and said they would support DFCU Owners United's efforts to ensure DFCU remains a CU. Most took petitions to solicit signatures to oust the board members. Malec also asked them to look within their companies for potential board replacements.
"We need to be ready," she said, smiling but abstaining from comment when a member asked if she would consider another board term.
The room exploded in applause when one member shouted, "Fire Mark Shobe."
Many at the meeting said they planned to join the "peaceful demonstrations" near DFCU's five branches. They called last weekend's effort at three locations successful as many members stopped to ask questions, join the picket line, and take lawn signs that read "Don't Make Our Credit Union A Bank."
"If I wanted a bank, I would have joined a bank," said Carmen Peterson of Dearborn, just after conducting a transaction inside the Oakwood-Beech branch on a busy Saturday. As she joined the picket line, Peterson introduced her nephew as a "future member here ...unless they become a bank."
Other members shouted from their vehicles, "I think what they are doing is despicable" and "You've got my vote" as they left the CU property.
The protest that started on Friday afternoon was met with obvious frustration by CU officials, including Shobe, Public Relations Director Kim Gabbert, and other staff and a security guard, who paced the sidewalks near the building at the Oakwood-Beech branch after attempts to get picketers to leave failed.
Longtime member Ray Ward said Gabbert, apparently surprised by his presence on Friday, accused him of soliciting members on DFCU property. Also concerned that his truck, a Ford F150 decked out with anti-conversion messages, was parked illegally, she phoned police.
Police on the scene said the vehicle was legally parked and told protesters they could remain as long as they were "peaceful." In fact, one member reported that an officer said that he was a DFCU Financial member who had already cast a "NO" vote.
Ward's truck was at the Oakwood-Beech branch again on Saturday, April 1, in plain view of members exiting a busy drive-through lane.
Employees Wearing Stickers
Meanwhile, inside the CU, employees wore bright blue stickers with the words "Vote For" and a giant check mark on them, while similar messages asking for support of the conversion adorned the lobby.
While Gabbert told a Credit Union Journal reporter that DFCU had no comment regarding the protest, she later escorted a Detroit Free Press reporter and photographer into the building where they apparently met with Shobe. A request that the CU Journal be given the same opportunity with Shobe was not answered by deadline.
Gabbert and Jerry Brandman, COO of DFCU, engaged in conversation with some of the 20 picketers on Saturday. While Gabbert apparently told a few of the protesters that DFCU was at risk of going down the same path as "Ford" and "Delphi," two original, core sponsors, if it didn't convert, Brandman invited members to "sit down with myself or Mark Shobe" for further discussion.
"How you feel and how other people feel needs to be respected," he said. But, when a member asked whether Shobe would gain financially from the conversion, Brandman stammered, "That's not ... This whole thing is ..."
Before retreating to a sidewalk away from the picket line, Brandman added, "This isn't the biggest vote you have. The biggest vote is in your wallet. Just give this a chance."