LAUREL, Md. — Prompted in part by the charter conversion effort taking place at the $320 million Lafayette Federal Credit Union, the largest CU in the state has taken steps to make any such move in its own future a good deal more difficult.
The board of the $1.5 billion Tower Federal Credit Union approved a resolution at its October 2006 board meeting as well as amending the CU's mission statement and bylaws to make sure any future conversion attempt has more input from members.
"Tower's Board of Directors and Senior Management are strongly committed to retaining Tower's credit union charter for the long-term benefit of its members," stated Board Chairman George Cumberledge. "We believe foremost that it's in the best interests of our members as well as to the credit union movement that Tower retains its charter and remains a credit union."
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The change to the bylaws mandates that the CU only consider a charter change after holding a special meeting, which was called for in a petition from at least 500 of the CU's members. As of the latest call report, Tower listed 114,000 members. Patricia Wagaman said the CU had decided on 500 members because that was the number already in the bylaws for other member petition efforts, such as to be put on the board ballot. She also said that the Lafayette situation had definitely heightened interest on the board for the topic, but that the board was very aware of other CUs around the country that have changed their charters. In addition to the 500 members needed to call a special meeting to start the conversion process, a majority of members at the meeting must also vote to ask for the conversion. The goal was to try to ensure more member participation in any future conversion decisions at their earliest stages, Wagaman explained.
Tower also amended its mission statement to incorporate language that highlights its desire to remain a credit union for the best interests of its members and to retain its credit union charter in perpetuity. The credit union plans to inform members of its commitment to remain a credit union and explain why it is important to understand the differences between credit unions and banks when it comes to the conversion issue. "Tower exists to provide superior service to all members by continuing to create and deliver value through the products and services the credit union offers," affirmed President Martin Breland. "Through our dedication to the financial well-being of our members, we will continue to support and reinforce the fundamental principles of a non-profit, member-owned credit union now and in the future." –[email protected]
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