SAN JOSE, Calif. – Technology CU announced this evening that members overwhelmingly voted down a proposal to convert the $1.6 billion credit union to a mutual savings bank, which would have been the biggest credit union conversion ever.
“Our members have voted and overwhelmingly indicated their preference to remain a credit union. We respect this decision and appreciate that so many of our members weighed in on this important vote,” said Barbara Kamm, president of the credit union.
With 25% of the credit union's 69,000 eligible members voting, 77% voted against the record conversion.
“The responsibility of the Board of Directors and management is to consider all strategic alternatives that may be in the best interest of Tech CU and our membership as a whole,” stated Mical Brenzel, chairman of the board.
“Our Board began studying some evolving trends in the credit union industry as far back as 2008. We noted the tremendous increase in share insurance assessments which credit unions must pay into the National Credit Union Administration’s share insurance fund and the continued reluctance of Congress to expand credit union lending powers. We also studied the FDIC’s insurance fund, which insures mutual savings banks, and determined that the performance-based assessment system of the FDIC would charge lower assessments for a high-performing financial institution such as Tech CU, helping to preserve our members’ capital.”
“Members at the special meeting voiced frustration, saying we did not make a compelling case for charter change. We, too, are frustrated that we were unable to communicate our views effectively and in the open manner we would have preferred because of the regulatory process and the related rules that govern how credit unions can communicate about charter change with their members,” said Kamm.
“We recognize our members’ strong commitment to the credit union industry, and we dedicate ourselves to working within the credit union charter to ensure that Tech CU continues to perform safely, securely, and successfully in the future,” added Brenzel. “Our members have spoken, and we look forward to the future as we remain a very successful credit union.”