Tower FCU Adopts ‘Poison Pill’ on CU Conversion

LAUREL, Md. – The board of Tower FCU, the credit union for the top-secret National Security Agency, made public a resolution committing to remaining a credit union, and approved tough new rules that would make it very difficult to convert to a bank, a so-called poison pill. “Tower’s Board of Directors and Senior Management are strongly committed to retaining Tower’s credit union charter for the long-term benefit of its members,” said Chairman George Cumberledge, noting the growing number of credit unions converting to banks, including some in the Washington area, an allusion to the ongoing controversy at nearby Lafayette FCU. Under new bylaws approved by the board, any proposal to convert to another form of financial institution must be requested at a special meeting upon the written request of at least 500 members. A member request to put the question to the Board must be approved by a majority of attendees to the special meeting. The $1.5 billion credit union will inform its members of its commitment to remain a credit union and explain why it is important to understand the differences between credit unions and banks.