Technology CU Conversion Opposition Gets Organized
Two Technology Credit Union members have joined forces to fight the potential coversion to a bank charter.
Carlos Rodriguez and Robert Marinace announced July 18 the creation of “Save TCU,” a group to organize other members opposed to the move.
Rodriguez, a member who had already launched a page on Facebook to publicize his opposition to the conversion and build support for its defeat, revealed the existence of the group in a letter to other Technology Credit Union members.
Rodriquez said he and Marinace, working independently, launched different projects but consolidated their efforts on July 14. The group now has fewer than 10 members, Rodriquez said.
“Over the course of the last 50-plus years, Tech CU has become a $1.6 billion institution and has attained a 9.99% net worth ratio,” Rodriquez wrote in the letter. “These numbers are good, really good, but the current executive team (all former bankers) and board of directors can’t take full credit for this. It’s taken over five decades to get us where we are.”
“Nonetheless, Tech CU’s officers and the board want to take our money, the money that members have saved and borrowed since 1960, and use it to build a bank. Building a bank from scratch is hard. Building a bank with a $1.6 billion head start is much easier. If the conversion passes, the bankers already have stated that there would be a peer compensation review. Additionally, since over 80% of credit unions that convert to mutual savings banks eventually issue stock, the officers and directors would profit by obtaining stock in excess of that available to other credit union members.”
In a separate letter to members, Marinace focused on different aspects of the charter change proposal, along with what he had discovered about the percentages of credit unions that become banks and issue stock and the numbers of former credit union executives and board members who profited from the windfall.
“As a retiree, it would be so simple for me to not care about our credit union and let it become just another bank,” Marinace said. “But we owe a great debt of gratitude to the Technology Credit Union over the years in helping us achieve our comfortable retirement. No bank could ever have done that for us. This is our way of paying our credit union back. I’m asking you to remember why you chose to join a credit union instead of a bank and to vote no on this conversion when you receive your ballot in the mail in August and to attend the meeting in September.”
Meanwhile, a San Jose, Calif., newspaper added more fuel to the fire buy raising questions about the credit union’s recent hiring, suggesting that the San Jose, Calif.-based credit union was hiring bank executives well in advance of actually changing its charter.
According to The San Jose Business Journal, the credit union has hired executives to head up a commercial lending division and a wealth management/private banking division as well as a new chief credit officer.
Each of the executives came from an exclusively or predominantly bank background, and the credit union has postings up for an additional wealth management/private banking manager and a chief compliance officer that would have an orientation toward bank regulations, including recommending and monitoring programs to “ensure the company meets the needs of the community and attains Community Reinvestment Act compliance goals.”
The Community Reinvestment Act regulations are exclusively aimed at banks, except in Massachusetts, which has a state CRA regulation that includes credit unions.
As of press time, Technology Credit Union had not responded to requests for comment on the hiring.
“I think this hiring spree raises important questions for members,” said Marinace. “What do they know about the vote that we do not that makes them so confident they will win that they have no problem hiring executives? Who will pay for any golden parachutes if the vote does not go their way, and the new hires have to be let go?” he asked.
The letters to members came at the end of a few days when Rodriquez answered allegations that he had not joined Technology for any other reason than to interfere with the conversion. These included objections from American Bankers Association Senior Economist Keith Leggett who challenged Rodriquez on his weblog Credit Union Watch.
“So, we have a credit union advocate joining a credit union in April that was in the middle of process of converting to a mutual savings bank,” Leggett wrote. “Something does not smell right about the timing of his joining of Technology Credit Union.”
But Rodriguez maintained that he had not known about the conversion attempt before joining Technology.
“I joined Technology with my own agenda and my own needs,” Rodriguez explained, adding that he had joined the credit union online and had only found out about the conversion attempt when he went to the credit union’s San Jose branch to open a business account.
Rodriguez is launching a video services business that will offer other small businesses an affordable way to add professional quality videos to their websites.
He said he had been shocked at the conversion news, and that he left the branch without setting up the account. “I took my money and left,” he said.
Rodriguez acknowledges having worked for several credit unions and having taking training to become a credit union development educator, but he said that was because he has been a strong advocate of credit unions since first joining one in college.
“As I said before, I believe more strongly than ever that when they do what they are supposed to do, credit unions are the single best tool we have to fight poverty.”