Over 13,000 of the 70,000 members of the $1.6 billion Technology Credit Union have voted to retain their credit union charter and not to convert their institution to a mutual bank, according to an announcement from the credit union.
Technology announced that roughly 17,500 members participated in the balloting, with 77% casting ballots against it and 23% or roughly 4,000 voting in favor.
“Our members have voted and overwhelmingly indicated their preference to remain a credit union," said Barbara Kamm, CEO of the credit union, in a statement announcing the results. “We respect this decision and appreciate that so many of our members weighed in on this important vote. Providing the highest level of service for members will continue to be our top priority – and we will do so under our credit union charter.”
In the same statement, board Chairman Mical Brenzel said, “The responsibility of the board of directors and management is to consider all strategic alternatives that may be in the best interest of Tech CU and our membership as a whole. Our board began studying some evolving trends in the credit union industry as far back as 2008.
"We noted the tremendous increase in share insurance assessments which credit unions must pay into the National Credit Union Administration’s share insurance fund and the continued reluctance of Congress to expand credit union lending powers. We also studied the FDIC’s insurance fund, which insures mutual savings banks, and determined that the performance-based assessment system of the FDIC would charge lower assessments for a high-performing financial institution such as Tech CU, helping to preserve our members’ capital.”
This last point appears to run directly counter to an analysis of the impact of the two insurance premiums conducted by CUNA Chief Economist Bill Hampel in October 2011.
Kamm also noted the frustration many members faced with the credit union's proposal to change charters and appeared to blame NCUA regulations for not being able to explain the credit union's reasons for conversion more clearly.
“Members at the special meeting voiced frustration, saying we did not make a compelling case for charter change. We, too, are frustrated that we were unable to communicate our views effectively and in the open manner we would have preferred because of the regulatory process and the related rules that govern how credit unions can communicate about charter change with their members,” Kamm said.
“We recognize our members’ strong commitment to the credit union industry, and we dedicate ourselves to working within the credit union charter to ensure that Tech CU continues to perform safely, securely, and successfully in the future,” added Brenzel. “Our members have spoken, and we look forward to the future as we remain a very successful credit union.”
Neither members of the credit union nor executives with the credit union itself have yet become available for comment.
Although it seems clear that Technology Credit Union will remain a credit union, it is unclear that the matter will end with the credit union announcement.
Technology's attempt to change its charter ushered in some firsts in the charter change process. This was the first time that members utilized an NCUA regulation that required the credit union facilitate their communication with other members about the conversion, and the first time this was done also marked the first time such email contained tracking software added by the credit union.
The NCUA has not yet indicated whether this practice conforms with its regulations and the agency may still want to amend its regulations further to address that. In addition, litigation stemming in part from the addition of that tracking software has also not yet been resolved.
Technology first announced it was considering a charter change in October of last year.