Mich. League Adopts Policies

Register now

NORTHVILLE TOWNSHIP, Mich.-The Michigan Credit Union League's (MCUL) board has adopted formal policies on the credit union charter conversion process.

Two billion-dollar-plus credit unions in this state have attempted to convert to a bank charter in recent years, Lake Michigan CU, Grand Rapids, and DFCU Financial CU, Dearborn.

With the latter, the league has also taken a formal position on a pending special membership meeting called in response to efforts to recall the board by opponents of the conversion bid.

In all charter conversion attempts, the Michigan league is calling upon lawmakers and regulators to adopt a number of changes, including:

* Banning prizes or raffles in the voting process.

* Requiring CUs to post conversion information on their websites and in their lobbies.

* Requiring credit unions to disclose the cost of the conversion process in marketing, mailings and related expenses.

* Requiring a secret ballot and an independent agency to conduct and monitor conversion voting.

League President David Adams reiterated that the league recognizes charter conversions as a member right, provided the conversion process is transparent and fair, and allows members to make an informed decision.

Meanwhile, in the DFCU Financial case, the league is:

* Encouraging DFCU Financial officials and representatives of the DFCU Owners United, the group opposing the conversion and supporting the recall, to "conduct themselves in a legal, civil, responsible and fair manner in dealing with the post-conversion special meetings and other activities."

* Encouraging both sides to put members' interests first and refrain from statements that may cause safety and soundness concerns, create alarm for members, or disparage the reputation of the credit union.

* Encouraging NCUA "to perform a role which would contribute to a legal, civil, responsible and fair meeting process. (c) 2006 The Credit Union Journal and SourceMedia, Inc. All Rights Reserved. http://www.cujournal.com http://www.sourcemedia.com

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