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DEARBORN, Mich. – The fight over whether the $1.8 billion DFCU Financial will recall its board has supplanted the fight over whether the CU would become a bank and is showing itself to be the uglier and more desperate struggle. The credit union leadership abandoned its quest to become a mutual bank on April 17, roughly four months after launching it, in the face of steadily growing member opposition which had finally begun a campaign to recall the credit union’s board, an effort which resulted in almost 2,000 signatures being delivered to the credit union on April 17 seeking a special meeting for the recall. The credit union’s reaction was swift and, sources say, apparently apocalyptic. According to the members group, which mounted the petition to recall the board, DFCU Owners United, DFCU has told its employees that if the board of directors is recalled that 200 DFCU employees will be fired. It has also allegedly called the former employees and board members who organized the group “liars, cheats and thieves” and has allegedly started calling credit union members who signed the petition in an attempt to get them to change their minds. The credit union has not yet responded to requests for information on what it has or has not done or what has or has not been said. The CU has put a letter up on its Web site in which the nine members of its board pledged, “we will not propose a charter conversion in the future.” The letter mentions successes the CU has made under the current board and appeals to a need for stability. “In this uncertain economic environment, which we have in southeastern Michigan, stability is important. We will continue to be the solid institution you’ve come to rely on,” the credit union said. The credit union also registered a Web site, which it put under the domain savedfcu.com. The CU registered the Web site on April 10, a full seven days before it officially withdrew the conversion application, according to Network Solutions, an Internet domain registrar. The savedfcu.com site charges that the almost 2,000 members of the CU that signed the board recall petition did not have the petition explained to them adequately and that the DFCU Owners United group is “a much smaller group of less than 100 members with the majority of them being former employees/board members with their own agenda and past track record of poor performance while associated with DFCU Financial.” The credit union has also started distributing brightly colored fliers and brochures which reiterate the CU’s themes that the board opponents are incompetent at best and dishonest at worst and urging the members to “protect your money, save your credit union.” In all of this – the Web site, the alleged threat to jobs and investments, the allegations of incompetence on the part of the opponents – the board appears to be adopting the same strategy to save their positions as the former board of the then $600 million Columbia Credit Union did in Vancouver, Washington, in 2004. The situations of the two CUs are almost eerily similar. Both had failed attempts at credit union-to-bank conversion, both had member groups energized by the attempted conversion, and both member groups launched efforts to recall the board that persisted even after the CU announced it was not going to become a bank, and both boards of directors responded to the situation in much the same way. In the face of attack, the Columbia board saved their positions temporarily by resorting to energizing the CU employees and members with dire predictions of what would happen if they were thrown out. They also registered a Web site and called their opponents names as well, questioning both their competence and ethics. The strategy worked since the board members scraped by the recall vote by narrow margins. Eventually, however, every sitting board member was replaced in the next election where it was possible to do so.

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