NORTHVILLE TOWNSHIP, Mich. — Dave Adams, CEO of the Michigan Credit Union League, has urged the $1.8 billion DFCU Financial and the DFCU Owners United group to seek common ground they could use to end their dispute.
The credit union and members group are fighting in court as DFCU Owners United seeks to force DFCU to hold a special meeting at which some or all of the credit union's board of directors could be recalled. DFCU Owners United submitted over 1,700 signatures requesting the meeting and maintains it is struggling to hold the credit union to its own bylaws.
To initiate the reconciliation process, the MCUL has called for DFCU officials to indicate a willingness to have open dialogue with the membership about the future–possibly at the next annual meeting–and re-commit to an open and fair process for electing directors. In return, the MCUL is urging the DFCU Owners United Group to see these actions as indications of good faith on the part of the board of directors.
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Adams explained that the league's concerns were motivated by wanting to see the situation yield the best outcome for the CU and to avoid having the situation linger for a long time in the courts.
"Anybody who takes a look at the unfortunate situation still going on at the Columbia Credit Union can see that taking a legal approach alone will not necessarily lead to the result that everyone wants," Adams noted.
Columbia has experienced a series of court cases and controversy related to the aftereffects of its failed attempt to become a mutual bank in 2003.
Adams explained that the league's proposed reconciliation would build upon each side being willing to make concessions. On the credit union side, the chief one would be the withdrawal of the decision to become a bank and a willingness to continue as a CU, but it would also include allowing members of DFCU Owners United to run for the board in the coming open board elections. Adams said 33% of the board's current seats are up for election in this round.
Members of the DFCU Owners United would, in turn, drop the lawsuit in state court and be willing to work with the credit union leadership on areas of common ground.
"I am optimistic that this can be done," Adams said, even though he acknowledged that neither side has really laid out how it wants to see the CU develop and that emotions have run very high in the dispute.
Adams also tried to draw a separation between the specific facts of DFCU's case and the broader question of credit union bylaws and bylaw enforcement that he said the DFCU situation brought to light.
"I don't think we want our state's largest credit union to become the battleground to try to settle these questions," Adams said, emphasizing the MCUL still firmly believed credit unions must follow their bylaws and that regulators should enforce them. "Period," he said, "Nothing has changed in our position on that." Adams said that the bylaws and bylaw enforcement question was one that the industry needed to take up as a whole and that the MCUL would be willing to take part in that discussion. He also said he believed the NCUA was "simply wrong" in its decision to throw bylaw enforcement into the courts. "The courts are just not the best venue to try to settle these questions," Adams said. "We all know how they work or fail to work. If there was a judgment, of course we would expect an appeal and then perhaps another appeal. A state court, or even a district court, in Michigan is not the place to make a decision about this issue," he added. –[email protected]
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