NCUA Says 'The Fold' Swayed Community CUVoters

Register now

ALEXANDRIA, Va. - (07/12/05) -- NCUA formally denied Community CU'srequest to certify last month's vote to convert to a mutual savingsbank Monday and asserted that the infamous way the first two, ofthree, mail ballots was folded and presented to the credit union's240,000 members unfairly influenced the vote. In an 11-page letterto representatives of the $1.4 billion credit union, obtained byThe Credit Union Journal, NCUA's Region Five Director Jane Waltersmaintained that while 72% of the 36,000 Community CU members whovoted in the three mail ballots approved the conversion, a majorityof those voting in the third ballot, after credit union officialsagreed to alter the controversial fold to present the agency'srequired boxed disclosures first, voted 'no'. "This (the way thedisclosures were presented to voting members in the first twoballots) materially altered the voting patterns between the firsttwo mailings and the third," ruled Walters. "Specifically, afterthe first two mailings, in which CCU failed to present the boxeddisclosures as agreed, approximately 72.5% of members voting on theproposal voted in favor of converting. After the third mailing, inwhich CCU presented the boxed disclosures in a prominent andconspicuous manner in conformity with its agreement with NCUA,approximately 51% of voting members voted against converting."Walters said the Plano, Texas, credit union, the largest ever toseek conversion to a savings bank, could either appeal her rulingto the NCUA Board or conduct the balloting over.

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