What has happened in past conversion attempts?

Most conversion proposals have been approved, some have been successfully opposed by the member-owners, and one has been fair.

Community Credit Union: "What could go wrong?"

Photograph of Broken Piggy Bank with coins
Community Credit Union outside Dallas, TX converted to a mutual bank in 2006, and then to a mutual holding company/stock bank later that year. While the board and senior executives have personally made over $26 million by selling their members' institution, more than 98% of the members did not receive a dime in return. Now the bank is run to maximize profits, rather than to serve members with the best rates and services.

DFCU: "Our credit union. Our money. Our choice."

DFCU Financial Credit Union in Detroit announced its plan to convert in December 2005. After learning about how the proposed conversion would affect them, a group of concerned members formed DFCU Owners United to inform other members about the conversion. When the credit union's board repeatedly stonewalled the members’ requests for information about how and why they had decided to convert, DFCU Owners United took action. They successfully petitioned to hold a credit union meeting about recalling the board of directors. The directors have refused to hold this meeting, in violation of the credit union’s bylaws, but withdrew the conversion proposal in 2006!

Nationwide: "A Model Conversion"

Photograph of Piggy Bank with Dollar
Many look to Nationwide as an example of a fair conversion. Before taking the members' ownership to sell it as stock, Nationwide paid them for their ownership. Each member got a check for their share of the credit union, plus a premium to represent the value that ownership would gain when sold as stock. Nationwide showed that any converting credit union with the members in mind will pay the members their fair share. Nationwide's model is not the only fair way to convert, and may not be best. UC Berkeley professor and credit union expert James Wilcox has advocated distributing stock to members directly (summary, full report), and some have questioned whether Nationwide's payment to members was high enough or distributed in the best way (see "whose side?" article).

Lafayette Federal Credit Union: "Saved the CU"

Photograph of Members Who Saved Their Credit Union From Being Converted To A Bank
In January 2007, Lafayette Federal Credit Union in Washington, DC, withdrew its proposal to convert to a bank, largely due to opposition from members like Amber Books, Scott Stiens, and Ajit Joshi (right). Member Tom Carter explained his opposition to the conversion: "Their reasons are fallacious. This conversion gives them the opportunity for personal enrichment. They have a serious conflict of interest and may be denying their fiduciary duty to members." The CEO who had led the conversion effort was asked not to return.

Others

AGE Federal Credit Union
   "IPO Doubles the Money for Insiders at CU Convert", Credit Union Journal, 4/17/07

Atlantic Coast Federal Credit Union
   "Credit Union Conversions: The Gift That Keeps on Giving to Wall Street", Credit Union Journal, 5/9/07

   "Selling Your CU: The Retirement Gift That Keeps on Giving", Credit Union Journal, 4/16/07

   "Former CU files for second step conversion", CUNA News Now, 9/26/07

Citizens Community Federal Credit Union
   "Speculators Charged With Stalking CU Conversion Candidates", Credit Union Journal, 10/01/07

   "The CU Two-Step: Kicking Up Fees for Wall Street", Credit Union Journal, 12/29/06

Columbia Credit Union
   "Board Members Who Attempted To Convert CU Are Ousted In Vote", Credit Union Journal, 09/20/04

   "An Aversion To Conversions", Credit Union Journal, 02/23/04

Community Credit Union
   "Former CU Buying Back Shares", Credit Union Times, 11/26/07

HarborOne Credit Union
   "HarborOne Credit Union's plan to be a bank draws fire", Boston Globe,5/7/2012

Har-Co Conversions In The News

Lake Michigan Credit Union
   "Members Question Board On Motives Behind Conversion Attempt", Credit Union Journal, 12/13/04

OmniAmerican Credit Union
   "CU Convert Trims Jobs to Stem Losses", Credit Union Journal, 9/17/07

Pacific Trust Federal Credit Union
   "Former Volunteer Directors Build Retirement Nest Eggs on CU Convert", Credit Union Journal, 3/21/07

   "CU Conversion As A Retirement Plan", Credit Union Journal, 4/14/06

Pentagon Federal Credit Union
   "Pentagon FCU Analysis Of Conversion Finds No Value", Credit Union Journal, 5/23/05

Rainer Pacific Credit Union
   "Wanna Be a Millionaire? Convert Your CU to Bank", Credit Union Journal, 5/11/07

Synergy Federal Credit Union
   "Another Converted Credit Union Gobbled Up", Credit Union Journal, 8/16/07

   "Bank Conversion as Retirement Plan for CU Directors",Credit Union Journal, 04/02/07

Technology Credit Union

Think Federal Credit Union
   "Members Of 1.2B Think FCU OK Move To Bank Charter", Credit Union Journal, 3/20/07

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