AUGUSTA, Maine -- Even though he acknowledged the merger between the $51 million KV Federal Credit Union and Kennebec Savings Bank would take a competitor out of his market, an executive with another Augusta credit union wrote an opinion piece that the merger is a bad deal for credit union members.
Paul Guerrette, vice president of the $30 million Alliance of Maine Federal Credit Union, penned the piece appearing in The Kennebec Journal, in response to an opinion article from KSB CEO Mark Johnston in support of the merger.
"The credit union members are being told that, following a merger, they'll still have a voice in the decisions made at Kennebec Savings Bank, but their vote will decide whether the merger happens. Current customers of the bank don't get a vote," Guerrette wrote. "If mutual savings banks were 'just like credit unions,'" the Federal Credit Union Act of 1934, which paved the way for the establishment of credit unions across the country, wouldn't have been necessary."
Guerrette said he had been a member of KV when KV was the St. Augustine Federal Credit Union but that he had closed the account after KV began charging inactive account fees about 10 years ago.
Guerrette added that he had been led to write the opinion piece after Johnston's appeared and he believed Johnston's piece only gave one side of the merger picture.
Guerrette observed that many KV members likely underestimate what a good deal this merger will be for the bank. Specifically, he addressed Johnston's contention that the transaction is a merger and not an acquisition.
"That's only because the credit union is voluntarily turning over all of its assets, including more than $5 million in capital, all of the member shares and loans, two nearly new office buildings, an ATM network and some prime real estate in Augusta and Oakland," Guerrette wrote.
He acknowledged that, after the merger, KV members would still own those assets but not to the same degree. "That means the wealthiest savings bank depositors would receive a disproportionate share of the combined assets, which makes this a great deal for the savings bank and its current clients, but not for the credit union members," he said.
--dmorrison@cutimes.com
