Earlier this week, a peer shared with me the news of a new and unprecedented happening in credit union land…a hostile takeover attempt. This type of takeover attempt is very common in publicly held companies, including banks, but has never happened in our corner of the business universe. News of this is spreading like wildfire and individuals, regulators, trade associations and vendors are weighing in. What follows is a part of a letter that one of Verity’s vendors sent that describes the situation and includes some very useful links:
Over the weekend Wings FCU based in Apple Valley MN(Total Assets about $1.7 Billion), made what can best be described as a HOSTILE takeover attempt of Continental FCU. They had turned down several overtures made by Wings FCU to merge. Wings FCU solution has been to go the press and slam CFCU as not providing needed services etc. to its members. Go to www.continentalwings.com/ASP/home.asp Wings set up this site without CFCU knowledge. CFCU currently offers GREAT services to its members and is working everyday to do MORE for its members just like you are. Wings just wants the CAPITAL of CFCU. Wings FCU has been acting like this is a great deal for all the parties. The president of CFCU Tom Glatt heard about the “great deal” when CU times called him to ask his thoughts. CFCU response to this ambush can be found at http://www.continentalfcu.org/news/NoStrings.php Check out the CU times articles www.cutimes.com breaking news section.
The letter goes on to ask us to write our regulator to ask that this stop today.
I am a capitalist and firmly understand the need for mergers and acquisitions that are sometimes hostile. Credit Unions however are unique types of businesses, which are trying desperately to distinguish themselves from banks. While this act is not against the letter of credit union law, it certainly flies in the face of the spirit of the credit union movement and seems very bank-like to me. We don’t need to give bankers another reason to attack credit unions and our tax-exempt status. Wings FCU actually considered converting to a bank back in 2003 but ultimately decided to remain a credit union. Its CEO, Paul Parish had this to say, “We feel there is great value in remaining a credit union. Our board has and will focus on remaining a credit union.”
If Wings FCU wants to act like a bank, then for heaven’s sake, just become one. Please don’t do this kind of stuff that could have serious repercussions across our entire industry!
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