ALEXANDRIA, Va. – Pentagon FCU became the first credit union in the country to formally swear off converting to mutual savings bank by adopting a Members’ Bill of Rights, the credit union giant announced yesterday.
The Members' Bill of Rights, adopted at Pentagon’s May 13 annual meeting, asserts that "the board remains committed to maintaining the institution as a credit union."
It also states that the Board of Directors would only consider changing its organizational form to a mutual savings bank under extraordinary circumstances, like taxation, a risk to safety and soundness of the industry or to the National CU Share Insurance Fund, or a material change in business powers.
In adopting the Bill of Rights, the credit union giant noted that 33 credit unions have converted to mutual savings banks since 1995 and asserted that "the conversions have not always been in the best interests of credit union members."
Any change to a mutual savings bank would only be recommended by the Board after a full, fair and complete review by an independent third party who has no financial interest in the outcome, the Bill of Rights states.
Any conversion or organizational change would include provisions barring all directors and management executives from obtaining any financial benefit not available to general members of the $10 billion credit union.
