Lafayette Credit Union shields member mailing lists

In response, the “Save My Credit Union” faction is petitioning for the recall of the Kensington-based credit union’s nine-member board. The board, the group says, has not been forthcoming with conversion information. Launched Saturday, the recall petition had netted about 80 signatures by Monday. Seven hundred fifty signatures are needed by Dec. 16 to force a special meeting on the recall proposal.

The direct mail request was denied, said Lafayette FCU President Michael Hearne “basically because [members] would be unhappy if I allowed just anyone to start contacting them with information that they thought as necessary for them to have.”

But Hearne will let the dissidents — who, in a probing, recent letter to the credit union’s board, questioned the fiduciary propriety of privatizing mutually owned assets — inspect meeting minutes and conversion papers. They will also be allowed to pose in-person questions to him and board Chairman Arnold Rosenthal.

They will not, however, be provided written responses to their skeptical letter, Hearne said. “There is no instance of a conversion where the benefits to the members have increased,” said conversion opponent Tom Carter, an USAID grant coordinator for overseas cooperatives. “There are benefits to the CEO, the staff and boards, however.”

Referring to the possibility that Lafayette’s might further convert to stock ownership, Hearne said all officers had forsworn preferential stock option incentives, opting instead for offerings on an equal basis with all account-holders.

Initiated in June, the conversion would make Lafayette the fourth-largest credit union of 29 to convert to a mutual bank since 1998. The institution has some $6 billion in assets. The controversy has implications beyond the Lafayette conversion itself. Credit union-to-bank conversions are one theater in a war between credit unions and the banking trade associations, which object to large credit unions getting a tax exemption.