ROCHESTER, Minn. — At least some members of the $1.2 billion Think Federal Credit Union are skeptical of their CU's plan to convert to a mutual bank and have been sharing their skepticism on the Internet.
Jeff Kiger, business editor for the Post Bulletin, a local paper based in Rochester, has a Weblog where he shares business news and where readers comment on the items. On Sept. 28, Kiger wrote about the letter from Think about the conversion, on Oct. 2, he detailed former executive Paul Kundert's comments about it and on Oct. 4, included the reactions of some members.
All told, roughly 20 people, most of whom identified themselves as Think members, commented on the postings and most of the reactions ran from skeptical to negative.
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"This is NOT good for the members of the credit union," wrote a poster who only gave his first name of Bill. "Historically, it is the CEO and the board that come out the winners in these conversions. Several studies show that the membership gains nothing when a credit union converts to a bank. And, in fact the members lose voting power and end up paying more in fees. NOT GOOD!"
Another, Dennis Chernyshov, noted, "Many credit unions that have gone down this path are in litigation for years with legal fees eating up member equity and diverting management attention from running the organization. Must be the millions in personal enrichment at the end that are worth the hassle."
Another member, who posted anonymously, noted that there might have been signs of the impending change for some time.
"Think's motto has always been, 'The member comes first,'" the member wrote. "If the charter change passes, there will be no more members. Instead, profit will come first, not the member. Think will tell you that becoming a bank won't change a thing, but I've noticed Think has already begun using the word customer instead of member in some publications and when speaking in person to their members. Twenty-four months ago, you never would've been called the 'c' word."
The only posters in favor of the move speculated that Think, as a bank, would be able to make more commercial loans and thus would be able to bring more personal services and personal products to the market. But others countered by wondering how Think thought it was going to be able to do better at commercial lending, as a new bank, than other banks that had been doing that sort of lending for years.
But in Kiger's post on member reactions, he noted that the most positive member reactions to the move he received had come from senior citizen Think members.
Think has applied to the Office of Thrift Supervision to make the charter change and sent its proposed disclosure documents to NCUA. NCUA has until one month after they receive them to evaluate them. OTS has said it will rule on Think's application by Jan. 11, 2007. –[email protected]
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