Charter Change Debate Underway at KV
AUGUSTA, Maine -- KV Federal Credit Union held two meetings last week to take some questions from the membership and explain why it is looking to merge with Kennebec Savings Bank.
Even though its board will not officially vote on the proposal until Oct. 14, members of the $51 million KV Federal Credit Union have already started to actively debate whether or not KV should merge with the local mutual bank.
The conversation has touched on whether the credit union needed to merge at all or, if it did need to merge, why not merge with a credit union. Members have also been interested in discussing what will happen to their equity, which the credit union has estimated at roughly $600 per member in press reports; whether KV executives who continue on with the merged bank stand to benefit from the merger; and how the merged bank will compete on interest rates for saving products and loans.
Though Anne Boulette, a KV member who also happens to be a former 35-year CEO at KSW Federal Credit Union, is opposed to the merger, she praised the credit union leadership for how they conducted the Sept. 30 meeting. Boulette said she stayed for the entire two hours and characterized its tone as civil and professional; she added the CU's leadership was open to taking questions about the merger. She said that KV leaders also were explicit that the merger would not go forward without the KV members' consent.
Boulette said she considered many of the members attending the meeting to be skeptical to negative about the merger, with several standing up and saying that if the CU completed the merger, they would take their money and leave the institution. But another member, who asked to be identified only has Helen, said she considered the attitude of the members as more of "fact finding" than necessarily negative.
The credit union had not returned phone calls to comment on the meetings as of press time.
The second meeting was scheduled for Oct. 1 in Oakland, Maine.
External debate has played out in the local press. In particular, two Augusta newspapers, The Kennebec Journal and The Morning Sentinel, have covered the story and published letters to the editor about it. The papers share a Web site (www.mainetoday.com) that allows readers to react and comment on stories as well, and these have become a platform for some informal discussions.
In reaction to one report on the merger idea that ran on Sept. 28 in The Sentinel, a Kennebec Savings Bank customer commented that he found the bank easier to deal with and better equipped to help him than the credit union.
But another reader, identified as Scully from Waterside, Maine, countered that the merger proposal made him or her glad not to have moved to KV.
"I almost switched to KV Credit Union a while back because it's close to work and home, but I am so glad I didn't," Scully wrote. "I will stay with the CU I am currently with. I refuse to do business with banks."
Boulette also penned a letter to the editor that appeared in the Sept. 27 Sentinel. "I am totally against this proposed conversion and merger," she wrote. Boulette served as CEO of the now $30 million KSW Federal Credit Union from 1968 until 2003.
"I joined a credit union for many reasons, not only because I believe in the philosophy of the credit union system, but also because I receive better rates on my deposits and more competitive loan rates," she wrote.
Executives from the bank and credit union that have made the merger proposal took their arguments to the local papers as well.
In a Sept. 28 article in The Sentinel, KV FCU CEO Beverly Beaucage and Kennebec Savings Bank CEO Mark Johnston said that the post-merger bank would not necessarily offer the bank's current savings rates--which are lower than KV's in many areas. He also noted that the salaries of CU executives who move to the bank would not rise.
In addition, Johnston wrote an opinion piece in the Sept. 30 Sentinel, defending the merger proposal, arguing that it would be best for members of both institutions.