SAN JOSE, Calif. – A state court is scheduled to hear arguments Thursday on whether Technology CU should be required to turn over a members list to dissident members seeking to block the $1.6 billion credit union’s conversion to a bank—the day after credit union is expected to announce the results of a member vote on the conversion.
The state court could rule in favor of the dissident group and require a re-vote on the conversion or rule the issue moot, thereby clearing the vote results for potential certification by NCUA.
But the dissidents promise they won’t go away easily and whatever the court rules they plan to launch a petition drive to recall the Tech CU directors who waged the conversion bid, the biggest ever for a credit union.
“The vote is over, but there is something else that can be done and that’s a special vote to recall the board,” Paul Popescu, a member of Tech CU since 1996 who is seeking to block the conversion, told the Credit Union Journal Saturday.
Popescu had asked Tech CU management for a member list so he and his allies could communicate their opposition to the membership but he was denied the list. The credit union has gone to court seeking a declaration that it doesn’t have to provide the member list.
Meantime, the opponents have asked NCUA to investigate allegations of irregularities in the voting, particular the alleged use of spyware by the credit union allowing it to track member emails. According to the state court suit, a letter opposing the conversion forwarded by the credit union to members had embedded “servlets” to monitor members’ response to the opposition’s letter. The "servlets,” according to the suit, allowed management to track activation of informational links and to track members’ who said they were interested in voting “no” on the conversion. Opponents allege that emails they received from the credit union were “infested with embedded servlets.”
A source at NCUA, which must certify the member vote, has confirmed that they have received complaints about alleged irregularities in the balloting and are investigating the complaints.
Tech CU is one of two billion-dollar-plus credit unions in the process of converting to mutual savings bank, along with $1.9 billion HarborOne CU of Brockton, Mass.