Stock Conversions. The Rest of the Story

Mr. Herb Moltzan’s opinion piece in the April 14th Credit Union Times doesn’t make sense to many of us who have also had to deal with a restricted credit union field of membership. CEFCU was an acronym for Caterpillar Employee Federal Credit Union. Over the years Caterpillar, Inc. had terrible labor turmoil, which caused us severe bad debt problems. Instead of converting to a bank, we chose to add SEGs and convert charters between federal and state to get the diversity we needed. Today we are once again state-chartered (Citizens Equity First Credit Union) because Illinois is now quite liberal when it comes to expanding FOMs. We are the number one financial institution in Central Illinois in all credit union/banking activities except for business loans and trust accounts. Relative to Mr. Moltzan’s other points, most credit unions are worth far more than the total reserves or net worth indicated on a balance sheet. For example, CEFCU’s net worth is $260 million. I personally believe its true value is at least twice that amount considering the so-called “intrinsic goodwill.” Hopefully, Herb explained to all members that the balance sheet net worth of a credit union is very questionable for buy out purposes. However, insiders should not have been surprised to see “their investment grow 200% in three years” as Mr. Moltzan indicated. It would be interesting to learn what percent of the members of BUCs Federal Credit Union are now stockholders of BUCS Federal Bank. Most of them? Yeah, right! John Siefken, Director Retired CEO CEFCU Peoria, Ill.