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WASHINGTON – For the second time, an organization seeking to organize credit unions or credit union members to counter credit union to bank charter conversions has received a warning letter from a group of bankers supporting credit unions which are seeking to make the change. The Coalition for Credit Union Charter Options, the organization advised by former credit union executives who have become bankers, has charged that Jim Blaine, CEO of the $13 billion State Employees’ Credit Union, headquartered in Raleigh, North Carolina, is behind members of the $1.4 billion Community Credit Union who are organizing themselves to oppose that credit union’s conversion. In an April 29 letter to the Coalition for Member Trust, the organization of Community CU credit union members, Lee Bettis, a retired former credit union executive turned banker turned Coalition executive director, wrote: “We note that your Web site is registered in North Carolina, leading us to believe this effort is being led by Jim Blaine, CEO of the State Employees’ Credit Union. We also note he accompanied your representatives to the AGM of one of the Texas credit unions that has proposed a plan of conversion to its members.” The $1.4 billion Community Credit Union and the $1.2 billion OmniAmerican Credit Union, both headquartered in Dallas, have filed applications to change their charters to those of mutual banks and have scheduled special meetings for members to vote on the charter changes. Using language similar to that used in a March 30 letter to Craig Rohden, the CEO of the $20 million Space City Credit Union, headquartered in Houston, the Coalition suggested that retribution could follow for any claims about Community’s charter change effort: “While we respect your right to make your views known, you and your colleagues should take an equal amount of care to get your facts right,” the Coalition wrote. “We also encourage you to refrain from making libelous claims about undue `enrichment’ as a motivating factor behind the decisions to adopt plans of conversion.” the letter added. Craig Rohden received his letter after publicly pledging $1000.00 to a media campaign designed to help reach Community and OmniAmerican members. But Mark Arnold, spokesman for the member group said Bettis’ letter fell far short of accuracy. “We are not led by Jim Blaine, I have never even met Jim Blaine,” Arnold said. “Yes, some friends of mine in North Carolina helped me do the Web site, but they are not in any way linked to Jim Blaine,” Arnold added. He also said that the group ran its material passed a lawyer and that they had not said anything remotely “libelous.” Blaine could not be reached for comment after the letter but, in a previous phone conversation denied having any connection to the member group. He said he attempted to attend Community Credit Union’s annual meeting in order to hear what Dick Ensweiler, CEO of the Texas Credit Union League and Chairman of CUNA would say and to talk to Community CEO Gary Base. Bettis said that the Coalition was not about intimidating anyone but instead wanted to help get out what its members saw as the truth about the conversion issue. “It makes no sense to us that a group should be allowed to publish lies and half truths [about the conversion]” Bettis said, “ when both Community and Omni are only allowed to say what the NCUA has approved them to say.” Bettis’ letter points out that mutuals retain their member ownership and governance, but Bettis also acknowledged that this is primarily for big issues, such as whether to adopt a mutual holding company structure. In many routine aspects of administration, such as board elections, many mutual bank boards cast members’ votes by proxy and don’t even actually send out ballots. The Coalition’s letter also attacked two organizers of the group, Mark Arnold and Elaine Laroa with not really representing Community members because they either work for another Dallas area credit union (Arnold) or used to work for the Texas Credit Union Foundation (Laroa). “What you are, in our belief, are representatives of a credit union movement that feels threatened by a handful of charter conversions,” the letter said. “As fifth columnists for their corporate agendas, you have become willing pawns for the state and national credit union trade associations whose conflicts of interest over the potential loss of dues dollars and influence are glaring.” But Arnold countered that he and Laroa are both Community members and have been for years and that other long-term Community members had also begun joining their effort. “Whether or not you work for one credit union doesn’t mean you can’t be members of another,” he pointed out. Arnold also noted that for a letter, which Bettis claimed to be all about facts, the Coalition had made a lot of accusations, none of which were true. “We are credit union members who don’t want to sit by and watch a credit union we love and respect turned into a bank. It’s that simple,” Arnold said. -

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