On December 28th, the 85-year, $35 million Post Office Credit Union (POCU) in Madison, Wisconsin will cease to be an independent charter. After voting, the 3,196 members and their savings, loans and abundant reserves (22% net worth) will be transferred to the $26 billion PenFed Credit Union in Virginia.
Why care? After all UPS, Federal Express, DHL and even Amazon can fill the needs if the Post Office itself were to close. Same with financial options–aren’t there plenty?
Members Uninformed What Their Vote Enables
The members are not informed about what is happening by their required vote. The intent of the organizers of this action is to announce the deed as late as possible, limit the voting period to minimum required interval, and make the process appear as just another routine event in the life of the credit union—as the members are asked to drink the cooperative Kool Aid.
What POCU’s members are approving in surrendering their charter via merger is:
- A new board of directors, whom they do not know and have never been told about.
- A new senior management team who has not been identified or even presented.
- A new business model (virtual), very different from their current one—PenFed is 742 times larger and serves over 2.1 million members.
- Accepting a service profile with no specific information of any changes in prices, services and fees. The five examples given are all INCREASES in fees.
- Loss of all control for any local service, employment, or business initiatives. All references to such are open-ended and subject to PenFed future review, including the $50,000 per year local contribution.
Joining a Harem
In summary, this is an arranged marriage, agreed in secret in April. The bride was informed in October. And still knows nothing about the groom and what will happen after the wedding. POCU will become just another junior member of PenFed’s credit union harem of 19 other charters.
Oh, and the broker of the deal, who had the authority to sign for the bride to protect her best interests, will then get to choose between a five-year $650,000 sinecure, or an immediate $437,500 payoff for his actions. PenFed is paid a dowry of $7 million to marry this unwitting bride. The family of bride will go away empty and the community will no longer recognize them as members.
The reaction to this situation in Wisconsin reminds me of a story that Dick Cavett once told. During a performance of Hamlet in Central Park, NY City, when they got to the part where he stabs Polonius, eight people got up and left because they didn’t want to get involved.
If those with the power, position or privilege fail to speak about this event, will these members ever trust credit unions again? Or as another American leader once said, “In the end, we will remember not the words of our enemies, but the silence of our friends.”
No matter our intentions or inattention, we are all stained. We watch an anti-democratic process fueled by self-interest not member well-being. Statutory terms such as “good faith,” “specific plans,” “best interests of the members” and the legally required “consent” of regulators is devoid of meaning. As the precedents of these calculated takeovers expand, credit union leaders shrug their shoulders accepting this as just the way of the world.
By our inaction we endorse the preying upon our industry by our own.
This acquisitive behavior is an assault on everything cooperatives stand for. It brings the capitalist model’s full range of animal spirits with none of the market’s checks and balances.
The Wisconsin statute requires a petition by 25 residents to require a public hearing on this event, should the DFI not do so on its authority. That hearing would give all those interested in the future of cooperatives to give the Board of POCU and PenFed to make their case publicly not behind closed doors.
Are there 25 credit union believers who are willing to ask that this activity be done in the full light of public debate and request the DFI hold a hearing?