In his opinion in the April 26 issue, Marv Umholtz unwittingly highlighted the flaw with the conversion process. He wrote, “Through a gaping flaw in credit union governance rules, a miniscule fraction of a credit union's membership can hijack the institution and thwart the will of the majority.”

Interesting thought, that a small group (say 12-15 board members) can hijack a thriving credit union and turn it into a bank. Even more interesting that in every case where stock was issued this “miniscule fraction” came out with significant financial gain. I haven't heard to date of one board and CEO that signed an agreement so they would not receive financial gain in greater proportion than any other member. I believe the 1,000-plus signers of the petition constitutes more of the will of the members than the (financial?) desires of the dozen or so members of the board.

As to the “will of the majority.” I was present during a conversation with one of the lead conversion consultants, who very aptly put it that 16% to 20% of the total membership would vote and 60% to 70% of those voting members would vote in favor for whatever was put in front of them. Interesting that it didn't matter what was put in front of the members. Perish the thought that members typically trust that, if the board and CEO are pushing for it, there is a sound reason for the credit union and they should support the decision.

Mr. Umholtz also put it very succinctly when he wrote, “Should a mere handful of motivated extremists be able to pack the meeting room with supporters and impose an ill-advised agenda on the credit union contrary to the wishes of the deliberately silenced majority?” I agree wholeheartedly that a mere dozen or so people should not be able to harness the operating expenses of a credit union to try to hold onto their seats or position themselves for personal gain.

Thank-you Mr. Umholtz for pointing out to us the flaws in today's credit union conversion process and structure. We need more supporters such as yourself helping to keep us “not for profit but for service.”

Tom Griffith CEO Pacific NW Federal Credit Union Portland, Ore.

Instant Insights /

Indeed Mr. Umholtz, a Few can `Hijack' a Credit Union

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