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DEARBORN, Mich. – The majority of roughly 100 members of the $1.8 billion DFCU Financial Federal Credit Union who attended the credit union’s 2006 annual meeting were firmly opposed to the notion of their credit union becoming a bank and, in the end, they said so with a motion against the charter change. The credit union, which was one of the early credit union innovators, applied with regulators to become a bank in mid-December 2005. It has since been negotiating with NCUA over the terms of the disclosure package it proposes to send to members. Sources who participated in the Feb. 15 meeting, which the credit union closed to the press, said that the motion had come from a former DFCU CEO, Donald MacKinnon, now 87, who ran the credit union from roughly a year after its founding in 1953 until 1981. The motion recommended the board reconsider its application for charter change and withdraw it. It passed 70-36, after three attempts to make certain the count was accurate, the meeting participants said. “I don’t expect they will act on the recommendation,” said MacKinnon afterward, “but I felt it was important that we get something on the record about how we feel about this and that we don’t like it.” The credit union conducted the meeting, which was held across from the credit union headquarters in the Dearborn Ritz Carlton hotel, behind the veil of polite but firm security that barred members from using recording devices or cameras. Members were further reminded that they could not distribute any materials to other members at the meeting and that comments during the member question and answer forum were limited to three minutes per speaker. Still, even with these limitations, members had no trouble letting their leaders know where they stood on the conversion question and the gathering provided something of an initiation for the brand new DFCU Owners United, the members’ group which has just begun to organize in opposition to the proposed charter change. Linda Malec, spokesman for the new group, said that DFCU Owners United had been very pleased by the enthusiasm and commitment for remaining a credit union that was evident in the meeting. Malec, who served on the CU’s board from 1980 to 2000 and was chairman during the 1990′s, said that the group started to coalesce when former employees and leaders read about the intent to change in the business media and trade press and then began to look each other up to talk about it. Malec, a human resources executive for the Ford Motor Company, said that the interest in what was going on grew as more people found out about it until, finally, the group had its first meeting in a church auditorium. Malec said that the goals for the meeting had been to show up to let the leadership see how much opposition there is to this move; ask questions; and try to pin the leadership down on how, exactly, the “legal structure change” (as the credit union called it in the meeting) would benefit members. Afterward, as she gave out contact information to members who wanted to join the group and huddled with other supporters to make plans, Malec signaled that the meeting had been a good start for the organization. “I think members really need to understand this is an issue from their perspective as consumers,” she said, “in addition to underscoring how much they wanted to remain with a credit union and not become bank customers.” Attendees at the meeting said that, for his part, CEO Mark Shobe tried to pour oil on the angry waters, downplaying the charter change by saying the credit union was merely proposing to change its legal structure and reassured members that it would not change the way it did business as a bank. Shobe also tried to make the case that the charter change would provide much needed flexibility that the CU will need in the future to succeed. But attendees also reported that Shobe’s demeanor and the extent to which he controlled the situation undercut him. “We kept asking questions to the board and expecting the board to answer them but all we kept getting was more Shobe,” said Eric Gubka, a technical trainer who said he felt slapped in the face by what the board had done in the conversion without consulting members. “And Shobe didn’t answer the questions,” he said. Meeting participants reported that Harold Lowman, chairman of DFCU, tried hard to couch the conversion in terms of the very rough times the Detroit area is having and at one point said that the credit union had not experienced real growth in years, but Malec pointed out outside the meeting that when she left as chairman in 2000, the credit union was only a $1.1 billion credit union but now it was an almost $1.8 billion dollar credit union. “Something has been growing,” she commented. Significantly, Shobe confirmed that DFCU has hired a Washington, D.C. law firm in order, meeting participants said, so that the CU could remind Congress about the law of the land regarding CU conversions. That effort might encounter a roadblock in the form of Representative John Dingell, a long-time Democratic legislator whose district includes DFCU and who has been known to favor credit unions. Shobe also told members to look forward to their disclosure packets sometime in March, giving a sense of where the CU is in negotiating the terms of the disclosures with NCUA. Attendees also reported that Jim Fleischer, an attorney with the Washington, D.C. law firm Silver, Freedman and Taff who is advising DFCU through the conversion, was also on hand during the meeting and that some members objected to his presence noting that he was not a member and that the meeting had been closed to the press on the grounds that reporters were not CU members. After the meeting it became clear that while some minds were changed, others still awaited more information. One older couple who left the meeting early said that they had been members for only six years and were customers of two other banks as well. They thought the proposal might have some merit and looked forward to hearing more. Thelma Chacussee, a member since the credit union opened in 1952, said that she thought the DFCU leadership had tried hard but that angry members had “put them through the ringer. Sometimes people just need to take a break to cool off and then come back to it,” she said. She also said she planned to read the disclosures closely. Ron Unger, an entrepreneur who had moved to Texas and still retained DCFU as his primary financial institution, said he had flown in for the meeting undecided and remained undecided. “I am going to have to do some reading on my own and some research before I make up my mind,” he said. But more common were responses from members like Don Johnson, a member since 1965 who said he had wanted to belong to the CU since the 1950s but that “back then they wouldn’t let African American’s join,” he said. Johnson said that he hoped members thought long and hard about the move but in the end vote against it. “I support my credit union because my credit union supported me,” he said. [email protected]

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