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RICHARDSON, Texas – Community Credit Union’s member disclosure materials state that a charter conversion to a mutual savings institution is “in the best interests of our members.” Some members believe tactics used by the credit union at their shareholder annual meeting held at Richardson Civic Center April 25, like not allowing latecomers to enter the meeting and not allowing anti-conversion literature to be distributed, suggest a different agenda. In most ways, the meeting was like any other annual meeting. The roughly 250 members in attendance heard reports on credit union successes and financial status, re-elected three board members (unopposed), and were eligible for door prizes. The whole thing wrapped up in a little more than an hour. But several things were noticeably different. Martin Sisk, who joined the credit union in the late 1960s and has attended approximately five annual meetings in the past, was not allowed to enter the meeting room, because he arrived 20 minutes late. Sisk was told the doors were closed and the computers used to verify all attendees’ member account numbers prior to entry had been shut down at the meeting’s start time of 7 p.m. In previous years, before the credit union applied to change its charter, the credit union has allowed members arriving late to attend the meeting. Sisk pleaded his case with Community’s legal counsel Lenny Nicholson, who also would not allow him entry to the meeting. Other members were told they could not enter the room without going through the proper procedures, but the procedures did not allow for latecomers. “I read my disclosures that came in the mail, and I called the Office of Thrift Supervision to find out what the rules were, and I was going to suggest at the meeting that if the credit union changed its charter, they should distribute the earnings among the members,” Sisk said, “but they wouldn’t let me in.” Among the others not allowed entry was Jim Blaine, CEO of the $12 billion State Employee’s Credit Union, headquartered in Raleigh, North Carolina. Blaine was restricted from the meeting because he was not a CCU member. Blaine told Credit Union Times that he wanted to attend the CCU’s annual meeting to hear what Dick Ensweiler, CEO of the Texas Credit Union League and Chairman of CUNA would say. Blaine has suggested in the past that Ensweiler is not taking a strong enough stand against credit union conversions to banks. Blaine also wryly said he wanted to get the information that he was sure Gary Base, CEO of Community has, proving that the move to a mutual bank was really in the best interest of the credit union’s members. “I know Gary Base would take his fiduciary duty very seriously so I am sure he has the opinions of independent third-party analysts and accountants showing that converting to a mutual bank is in his members’ best fiduciary interest,” Blaine said. ” I just wanted to see those, because if converting to a mutual bank is really in my members’ best interest, then I have a fiduciary responsibility to convert as well,” Blaine added. Ensweiler did question CCU management during a question-and-answer period that followed the door prize giveaways at the meeting. Ensweiler, also a CCU member, wanted to know why members did not receive “ more obvious notice” about the annual meeting date. According to Community’s VP/Director of Marketing Wendi Costlow, notification was comparable to what has been done to publicize past annual meetings. The credit union publicized its annual meeting with a two-inch boxed ad in its March 2005 member newsletter, a text message on its March statements, a notice posted in all branches the past 30 days, and a back cover one-third page ad in its Oct. 2004 newsletter. No announcement was made on the credit union’s Web site. Ensweiler also challenged the credit union’s unwillingness to use the word “bank” in conversion disclosure materials being sent to members. Concerning semantics in member disclosures, Community’s General Counsel Mark Hord answered Ensweiler’s objections by stating that NCUA had approved the disclosures, so they believe they are meeting their legal obligations. Another change to this year’s annual meeting almost landed CCU member Elaine Laroa in jail. Laroa, the former executive director of the Texas Credit Union Foundation, also was registered to speak in the Q&A session. Prior to her turn at the microphone, she began handing out a form that listed conversion implications and that urged members to vote against the credit union’s conversion to a mutual savings institution. An off-duty city police officer, hired by the credit union, quickly escorted Laroa out of the room. She was told she was in violation of the rules set by the credit union for the meeting. Specifically, the credit union had signs posted outside the doors to the civic center that read, “No campaigning or campaign materials within 100 feet of meeting area.” Laroa, who said she saw the signs but thought they were part of the city’s early voting signage, could have been charged with trespassing had she not complied in leaving the room, according to Richardson Police Department’s Sergeant Kevin Perlich. “When they told me I couldn’t hand out the literature, I said, `Okay, I’ll stop and wait my turn to speak,’” Laroa said, “but the police officer said, `No, you’ve lost your right.’” Laroa told the audience as she was escorted out, “They’re dragging me out, because they don’t want you to know the other side of the story.” At press time, Community Credit Union had not returned CU Times’ phone calls. [email protected] (Credit Union Times Staff Reporter David Morrison contributed to this story.)

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