Members Of 1.2B Think FCU OK Move To Bank Charter

ROCHESTER, Minn. - Members of Think FCU last week approved the conversion of the $1.2 billion credit union to mutual savings bank, the third billion-dollar-plus credit union to switch to a bank.

While recent conversion attempts at DFCU Financial in Michigan and Lafayette FCU in suburban Washington, D.C., have been halted by member revolts, no member opposition coalesced over this charter switch. As a result, the credit union giant was able to lower the controversy over the conversion and groups like the National Center for Member Trust, which funded legal challenges to DFCU and Lafayette, did not enter the fray.

The Think conversion passed by a margin of almost 500 votes, 51% to 49%, with 24,000 members voting. That represents about 30% of the 98,000-member credit union's 82,600 eligible voters.

The switch to bank represents the continuing evolution of Think, founded in 1960 along with two-dozen credit unions to serve employees of IBM Corp. With declining jobs at IBM, most of those institutions have evolved in a variety of ways; by merging, broadening membership bases, or changing identities. One is now known as Coastal FCU, another as Amplify FCU, another is Visions FCU, and still another is Meriwest CU.

But the Minnesota credit union has clung to its heritage, changing its name in 2003 to Think FCU to reflect the admonition of IBM founder Thomas Watson, and to invoke the IBM laptop computer, known as the ThinkPad.

About 200 members, almost half of them employees, attended last week's special meeting at the Mayo Civic Center here to culminate the 90-day vote. About 67 of them casts their ballots at the meeting, not enough to sway the vote, according to Tom Floyd, spokesman for the CU giant.

Most of the questions were of how the charter switch will affect rates, services, governance and compensation of directors, who will now be paid for their services.

Floyd reiterated the credit union's position that unlike other recent converts to banks, Think does not plan to convert to a stock-based institution. "We don't intend to issue stock. We don't intend to change the name and we certainly don't intend to change the services and products we offer," he said.

The mutual thrift charter, said Floyd, will give the institution, which now serves more than 300 select groups, the ability to serve broader markets and to expand the products and services its offers.

The vote, which was being finalized last week by Milwaukee auditors Wipfli LLP, must now be certified by NCUA. It is not clear whether NCUA will have the 10 days to certify the vote, as it did under the old rules, or 30 days as newly passed rules will allow.

The CU is the third largest, behind $1.4-billion Community CU and $1.3-billion OmniAmerican CU, to convert to mutual savings bank. Think is the third CU to convert to a bank over the past two months, including the much smaller Sunshine State CU, in Tallahassee, Fla., and Marcy FCU, in Syracuse, N.Y., which was folded into Beacon Federal Savings Bank, itself a conglomeration of five former CUs.

FOR MORE RESOURCES

Read more about conversions and the issues they raise at cujournal.com and search the following bolded terms in the archive:

Conversion, for a variety of stories on credit union conversions to bank charter.

Democracy, bylaws, for a number of stories on membership voting rights and the enforcement of bylaws.