Series Of Events Bring Conversions To Forefront
VANCOUVER, Wash. -
Late in 2003, a group of members at Columbia Credit Union had formed a small, underfunded effort to oppose the attempted conversion to a bank. Their opposition would culminate in a large crowd turning out at a special member meeting at a local high school at which the board barely survived a recall vote. The conversion plan was eventually dropped, the CEO left for Arizona, and the board members were eventually replaced when members of that small group, "Save Columbia Credit Union," were elected to the board.
The effects of Save Columbia CU were felt in 2004 far beyond its home along the river of the same name. It provided an example and inspiration to groups of members and credit union supporters elsewhere that planned conversions to a bank charter are not done-deals and that opponents, despite being at a huge disadvantage, could at the very least raise questions and at the most stop the conversion entirely.
The fight at Columbia had been nasty, and would remain nasty in subsequent years. Litigation, barbs exchanged through local and national media, confrontations with police, all became part of various conversion attempts. When the $1.1-billion Lake Michigan Credit Union announced plans to convert, the Michigan league responded not by urging members to vote against the plan, but to at least know the details of what they were voting upon. The league ran newspaper ads targeting members that were headlined, "Know What You're Giving Up." It also launched a website with more information. A slight majority of voters at LMCU would eventually vote in favor of converting, but those "yea" votes fell short of a requirement for state charters that calls for two-thirds to approve such a move. Today, Lake Michigan CU remains a credit union.
The member protests and the questions raised by those individuals and others finally pressed the credit union trade groups to demand that NCUA and state regulators begin to require greater disclosures to members when converting to a bank charter. It wasn't until 2006 that the agency finally put such rules into effect.