Talk about strained relationships.
With $1.8 billion of assets and 160,000 members, DFCU Financial Federal Credit Union is the Michigan Credit Union League’s largest dues-paying member. But the Dearborn credit union and the trade group are at odds over DFCU’s plan to convert to a mutual savings bank, and their dispute is headed to court.
In a lawsuit filed suit last week in Wayne County Circuit Court, DFCU claims that the group is out to sabotage the proposed conversion. Specifically, DFCU said the trade group has provided financial backing to a group of the credit union’s members who have been critical of the proposal.
The credit union also claims that much of the information put out by the league and the members group, DFCU Owners United, has been “defamatory and false.” The credit union is asking the court to order the league to end its support of DFCU Owners United and pay at least $50,000 of damages.
“It is clearly inappropriate for the Michigan Credit Union League … to interject itself between DFCU and its members,” Mark Shobe, the credit union’s president and chief executive officer, said in a press release.
David Adams, the league’s president and chief executive, has promised a vigorous defense. He said in a news release last week that the league is not trying to influence the member vote, but merely working to ensure that DFCU members get the information they need to make an informed vote.
DFCU Owners United says it is not necessarily opposed to the proposed conversion, though it has created a Web site with the address www.savemycu.com.
Margaret Blohm, a spokeswoman for DFCU Owners United, said its biggest beef with the credit union is over the lack of information it has released.
“I want to know how I, as a member, stand to benefit,” Ms. Blohm said. “I haven’t gotten anything from the credit union.”
That may be about to change, though. On Wednesday the National Credit Union Administration gave its final approval to the disclosure documents DFCU plans to mail to members along with their conversion ballots. The decision clears the way for the credit union to mail out the ballots.
Members have 90 days to vote from the date the ballots are mailed.
An attorney for the credit union said Wednesday that it has been slow to send information to its members because regulators must review all of its communications about the proposal.
