AUGUSTA, Maine — Readers of the Kennebec Journal's Sept. 14 story covering the possible merger of KV Federal Credit Union with Kennebec Savings Bank responded with skepticism to the consolidation.
Two comments reacting to the Sept. 14 story about the merger that ran in the Kennebec Journal were posted; both were opposed to the charter change and merger.
"The fact is that this merger can be voted against by the members of KV, and should be. Credit union members can use the bank now if they choose," a blogger named "kris77″ wrote.
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"All this merger would do is reduce the number of choices for KV members from a credit union and a bank to just a bank. I hope the reporter continues to look at this and report more on 'who' really benefits from this proposal. I'll give him a hint–it's not members of the credit union like my parents have been since 1975–it's the credit union president and board chair who would both be getting nice and comfortable paid positions with the bank and on its new board."
The reader concluded, "Ms. Beaucage [KV CEO] obviously forgets the credit union belongs to the members; it's not her own personal business."
Beaucage had not returned calls seeking comment as of press time. She previously characterized opposition to the merger from the Maine Credit Union League in the local press as a battle over "turf" motivated by a desire to hold onto the CU's dues money.
John Murphy, CEO of the Maine Credit Union League, acknowledged that he had met with the KV leadership to discuss the CU's options and other league concerns about the merger. He characterized the meeting as cordial and short.
"We will just have to see what happens on Oct. 14," Murphy said. The credit union's board of directors will meet to vote Oct. 14 on whether to put the merger decision before members.
Should the board decide to do so and should members vote to approve the merger, KSB CEO Mark Johnston said he expected the move to face relatively smooth sailing.
In the past, some credit union-to-bank charter changes have run into trouble when the FDIC declined to sign off on insuring the new bank. In the case of at least one credit union, the bank deposit insurer forced it to withdraw its application to make the switch and start over again.
But KV should not face any problem from the FDIC since its charter conversion and merger with KSB, while independent transactions, will occur at the same time.
"Since KV will never really do business as a savings bank, there will be no need for them to have FDIC insurance," Johnston said. "From the customer's point of view, the merger will take place the same day and will be effectively seamless."
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