SAN JOSE, Calif.-Emotions ran high at a special meeting of members for $1.6-billion Technology Credit Union's proposed charter conversion to a mutual savings bank.
The meeting took place on the evening of Sept. 12 at a Holiday Inn a few miles from the CU's headquarters here. Reports of what transpired are based on interviews of people opposed to the merger; representatives of First Technology have declined to comment on conversion-related issues.
According to Robert Marinace, a member of Tech CU since 1978 and one of the leaders of a group opposed to the charter change, there were 200 seats arranged theater style, with approximately 165 to 170 people in attendance. Tech CU CEO Barbara Kamm was on stage for much of the meeting, with the board of directors sitting in the first three rows of seats. A local attorney acted as parliamentarian.
"Most of the seats were taken by members opposed to the charter conversion, and I counted 17 people speaking against the conversion," Marinace told Credit Union Journal. "They were at the microphone scolding and telling off the directors and the CEO, Barbara Kamm-some more than once and in different ways."
'Meeting Was Heated'
Carlos Rodriguez, another member actively opposed to the charter conversion, told Credit Union Journal no one other than a board member spoke in favor of the conversion, while all members in attendance who chose to speak were against the idea.
"The meeting was heated, but it did not have to be," said Rodriguez. "Every step of the way it was clear Tech CU forgot what it means to act like a credit union-and that's the way it has been for three months now. There was a complete lack of caring about member input. It seems like they are already a bank."
Paul Davis told Credit Union Journal he has been a Tech CU member since 1984, and joined the anti-conversion fight last month. He said he has done a great deal of public speaking in his life, but became so emotional talking about the CU ideals that he could not get words out at the meeting.
"The board and CEO got a broad taste of member disappointment and anger," he said. "There was not one person I heard who spoke in favor of the conversion. The rules really limited any conversation, and the board sat with their backs to us. It seemed like a farce to even have this meeting, because every motion from the audience was ruled to be outside the scope of the meeting. All that really happened was venting of anger, which should have happened during the voting period to engage members."
At each seat in the room was a note with rules issued by Tech CU, one of which limited people to two minutes to speak, Marinace reported. "After Barbara Kamm finished talking my first objection was she had just spent more than 10 minutes making all of her points to start the meeting, so it was not fair to limit others to two minutes."
Rodriguez said the members in attendance protested the limitation, noting Roberts Rules of Order mandate the members themselves set the rules.
"We were told because NCUA reviewed the rules they in essence approved the rules," Rodriguez said. "There was some intimidation, and that's the way it has been. When we held our protests at branches there were two men in a car taking pictures of the protestors."
Rodriguez said he told the directors and Barbara Kamm [who also sits on the board] that they should be "ashamed of themselves" for "trampling on" the seven cooperative principles that guide credit unions, starting with democracy.
"For there to be true democracy, the voting should have taken place after the people received all the information they needed to make up their minds," Rodriguez asserted. "Tech CU edited Paul Davis' e-mail before sending it out, which I could not believe. One side should not control both sides of an argument. I reminded the board of directors that they represent us, they should listen to our views and not continue down what seems to be a pre-determined path."
Hiring of Bankers
For his allotted two minutes, Marinace said he addressed the hiring of 14 former banking executives by Tech CU over the past year-plus.
"All of these hirings were in advance of the vote, not knowing if the credit union would become a bank or not," he said. "I pointed out with all the salaries and overhead those hirings could amount to $2.5 million of the members' money being spent before the conversion, plus the $1.5 million the credit union has spent on the conversion, meaning there has already been $4 million spent for this whole affair."
Marinace said he concluded by reading one comment posted on Yelp.com callling for the board to be "impeached."
Not Much Optimism
Rodriguez said a motion calling on the board to refrain for two years from pursuing another conversion should the current bid fail was rejected by the parliamentarian, despite being seconded.
After the exchange, Marinace said a member got up and said, "Mr. Parliamentarian, you are full of crap."
"The fight is not over, and we are in the early stages of continuing the fight in other ways," said Rogriguez. "This could be the beginning of the end for the credit union system as we know it. We need to stand up as an industry and put a stop to this...People are staying silent, but it is not in the best interests of the credit union industry to stay on the sidelines in this fight.
Added Davis, "I would like to be an optimist, but we are facing an army of professional telemarketers who had access to the member list. I am afraid they will be able to eke out a simple majority [in favor of becoming a bank]."