Mrs_Sweetpeach (mrs_sweetpeach) wrote,

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Sounds like hubris to me

MCUL reports that DFCU Financial refuses to hold special membership meeting -- even though the DFCU Owners United group presented over three times the required 500 member signatures calling for a special membership meeting.

Thus provoked, I paid a visit to the mis-named SaveDFCU and looked around. When I got to their FAQ, I had to comment.

Comments on Three Questions in SaveDFCU's FAQ

Q: What was the petition all about?

A: This was about a small group of members who submitted a petition to recall the entire Board of Directors, which is a reckless and irresponsible act. This group did not like the fact that the Board asked the members to vote on a proposal to change to a mutual savings bank. DFCU Financial voluntarily withdrew its charter conversion application, which is what the group purportedly wanted, yet they still submitted a petition.

While it is true that the petition was withdrawn, the fact that it was withdrawn does not negate the fact that the board supported the conversion in the first place. That they could so underestimate the negative response casts doubt upon their ability to understand the needs and desires of the credit union members. If they are out-of-touch with the membership, replacing them continues to make sense.

Q: The petition said DFCU Financial didn’t disclose information. Is this true?

A: No, that is not true. The leaders of the small group wanted to review confidential, proprietary information, which we were not required to provide but would have allowed, if they signed a confidentiality agreement. They never responded to our offer. Signing confidentiality agreements of this circumstance is reasonable and a common business practice.

Confidentiality agreements may be common, but that doesn't mean demanding one is right. By signing the agreement, the reader is prohibited from revealing what was learned. If the board has been acting in the membership's best interests and the material supports this view, why prohibit the reviewer from saying so or explaining the reasons behind the boards' actions?

Q: Why is the petition invalid?

A: The removal of all board directors violates the Federal Credit Union Act (FCUA) put forth by Congress. The Board of Directors, in their fiduciary role to protect the interest of the entire membership, cannot put forth an action they believe to be illegal. Therefore, a special meeting of members will not be called so there will not be a vote.

I'm not a lawyer, but my understanding is that this is not true. Entire boards of directors can be removed. Doing so will not violated the FCUA.
Tags: credit union politics

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