By Christian Mullins
Another salvo has been fired in the proposed conversion of KV FCU in Augusta, Maine to a mutual savings bank, then merger into Kennebec Savings Bank. Last week, Kennebec Savings Bank President and CEO Mark Johnston made his case for KV FCU to join the KSB team. On Wednesday, Alliance of Maine FCU Vice President (and former KV FCU member) Paul Guerrette penned a response, stating the merger was one sided, and not favoring the KV FCU members.
Guerrette’s editorial began as so many of them do, by discussing the nuts and bolts of financial ramifications for credit union members. And rightly so, even if the material is a little dry. Guerrette must have thought so too, because the tone of the article shifted, going from member equity concerns to an all out attack aimed at KV FCU. While I’ve highlighted several passages below, I encourage everyone who has not already done so to read the entire article so each portion, and the overall message, can be taken into its proper context.
The credit union management says a merger will help the (sic) credit union remain competitive and allow it to provide the level of service its members expect, but that can be true only if the credit union is still around after the merger.
A slow economy, increased competition and the need for new products and services are the most commonly used excuses for lower-than-expected performance.
As a long-time member of St. Augustine FCU, which was KV’s original charter, I’ve watched as the policies and practices at the credit union have changed over time to the point where KV now charges higher fees than the for-profit bank they plan to merge with…It’s precisely these policies and that kind of reasoning that has driven so many of us away from an institution that was built by our family and friends.
While I successfully stayed away from ending each zinger with an old Batman TV show special effect, I feel comfortable saying that the gloves have come off, the popcorn is ready, and we can expect another three months of criticism against KV FCU’s President and Board of Directors, which they can try to justify to their members or ignore to their peril.
Technorati Tags: bank, credit union, KV FCU, Kennebec Savings Bank, merger, Augusta, Maine, Paul Guerrette
October 17, 2008 at 5:01 pm |
Interesting point that this CU’s policies and practices have changed such that their fees are now higher than the for-profit bank that wants to merge with them. This shows the perils of fee’ing your members to death… leading to short-term “bad” profits at the expense of long-term viability. Not to mention what a shame it is for a CU to find itself in this position. At the risk of alienating some folks, perhaps the CU movement is better off without this CU being a part of it. (Christian, I’m just trying to build your readership by inciting a comment riot, errrrrrrr, argument here.)
October 17, 2008 at 6:56 pm |
@Morriss
Thanks for attempting to incite discontent amongst the readership!
Maybe it’s a bit of a philosophical view, but I’ve always believed that when the credit union management doesn’t think they can overcome whatever situation has been presented (or they created), it’s time to replace the management.
Someone always has a better idea, and it’s my belief that, rather than fundamentally change the institution, they should fundamentally change its leadership (speaking generally, not specifically about this CU, though I’m not necessarily opposed to that either). Perhaps a new leadership can breathe fresh air into the organization, perhaps not, but with an option to merge always available, there’s no harm in trying a different approach first.
October 17, 2008 at 9:25 pm |
I recently learned from Gene Blishen that at Mount Lehman CU in British Columbia, they have an understanding that if the CU were in dire straits, they’d dissolve the institution and give the assets back to the membership rather than merge into another credit union.
October 20, 2008 at 9:19 pm |
@Morriss
Wow. Talk about making sure the member is taken care of. While I could see some members becoming angry at the prospect of having to research, then join, another financial institution, I’m sure the check containing their portion of the assets would help smooth everything over!