The description of the Valley of Dry Bones in Ezekiel is always brought back to life with Halloween. And in the song Dem Bones or the spiritual version Dry Bones. “Toe bone connected to the foot bone, foot bone connected to the heel bone etc .”
However this metaphorical story came to mind when reading the announcement of the proposed merger of the $1.3 billion Community Credit Union-Florida (CCU) with Launch Credit Union. also $1.3 billion.
Both are in sound financial condition with CCU maybe a step or two ahead on several vital indicators. However the main occasion for the merger appears to be the announced retirement of CCU’s CEO, a 29year employee, in October of 2023.
This is certainly the outcome reported in the mid-August 2024 public merger announcement: “Joe Mirachi, president/CEO of the $1.3 billion Launch in Merritt Island, Fla., would lead the combined financial institution. Laurie Cappelli, president/CEO of the $1.3 billion Community Credit Union of Florida in Rockledge, would retire and would serve in a consultant’s role as needed through system integration.“
These two announcements meant that for almost a full year, the five member CCU board and CEO have been working on a merger versus hiring a new CEO to lead this very successful credit union into the future.
CCU’s web site About Us describes the founding in 1963 as Brevard County Teachers credit union stating: Eight of the ten teachers signed a Certificate of Organization, and each of them subscribed to one share in the Credit Union for a total of $40.” Today the credit union manages $1.142 billion in shares for 57,938 members. The net worth ratio is over 11%. What happened?
Who Is Responsible for This Decision?
Who made this decision about the future of these 58,000 owners? From the public record, just six persons: the five board members and the CEO.
CEO Cappelli joined the credit union as a member service representative in January 1996 or over 28 years ago. She became CEO in February 2018. She describes herself on LinkedIn as a “Servant and Motivational Leader, Credit Union Advocate, Positive Influencer.”
Prior positions were at Black Hills FCU (13 years) and Kennedy Space Center FCU ( 2 years). Her public resume shows this is a person who would be fully aware that this act pulls up the ladder she used to ascend to leadership from all those now serving with her.
The public and professional credentials of the five-person board with their service tenures are described on the CCU website.
Board Chair Patmann has been a director since 2006 . Now retired he lists numerous community and board leadership roles.
Vice Chair Marvin has been on the board since 2016 and on the audit committee prior. He started his own company and has served on many educational and civic positions of leadership.
Board Secretary and Treasurer Dale joined the board in 1994. She is a CPA who owns her own firm and has served on multiple other public boards.
Board Member Gindling is the President/CEO of Space Coast Health Foundation and a board member since 2016.
Board Member Rains serves as the Executive Director of Communications at Eastern Florida State College and joined the Board in 2022.
All six of these leaders have extensive responsible community positions, individual professional qualifications and longtime roles with the board and credit union.
Why have they decided to transfer all of the credit union’s substantial resources to a leadership team with no history, no local involvements and no legacy relationships that built their credit union’s success since 1963?
One would have expected there to be a thorough strategic assessment, an in-depth due diligence of options and explicit member-owner benefits to justify the transfer of this self-sustaining, six decade old, member-owned financial firm.
Unfortunately, the press release was full of the rhetorical cliches and absent any specific facts or data that would substantiate why this option was chosen. Here is a typical excerpt:
“This collaboration demonstrates the credit union philosophy of ‘People Helping People,’ because together our combined resources and shared commitment enable us to offer enhanced products and services to our members while maintaining the high level of personalized service our members have come to expect,” Mirachi said. “We are excited about the opportunities this merger will bring and the positive impact it will have on our communities.”
Together, we will build on our legacies of trust, integrity and exceptional service to empower our members towards financial success,” Cappelli said. “We look forward to a very bright future together.”
Sounding Out Any Opposition
Moreover the FAQ’s with this public announcement appear to be a public “tolling” to see if there will be any opposition to this charter’s death:
We know it is not typical for a merger to be announced while still in the pre-agreement stage, however, we believe strongly in the benefits of this merger and believe that being transparent with our employees and members to keep them involved and informed throughout this process is the right thing to do. This also means we do not have all the answers as the boards are working to ensure all details are carefully considered. As the merger process continues, Community Credit Union will keep members informed of progress, including sharing important notices, dates, and events.
The Failing of the Cooperative Model
This case is not an isolated example of a deeply troubling reversal of the whole legislative and political justification for a non-profit credit union option in America.
Based on the public information and the latest financials, there is no member benefit to be gained, and no future service that the credit unions could not each accomplish. CCU’s board and CEO appear to have failed in their most basic fiduciary duty: to have a leadership succession plan for this 167 employee organization founded almost three generations earlier.
The CEO’s retirement announcement in the fall of 2023 was instead a mating call for other credit unions to step up with an offer. The details of that offer by Launch have yet to be disclosed.
A Sellout Worth $300 Million
Given the board’s abdication of its most important responsibility for CCU’s self-sustaining, it is virtually certain the members and the employees will receive nothing for their decades of loyalty and effort.
This is a blatant failure of democratic cooperative governance-a board oblivious to its accountability to the member-owners. Credit unions were designed to reflect a new and more equitable approach to consumer choice. A critical goal was to place the welfare of the community first and not the preferences and rewards for those who gained positions of power.
This sellout to a third party is unfortunately another example in which the members receive nothing except that which they already have—the promise of future service. This charter surrender is a betrayal of the credit union owners and the cooperative system. We know from multiple credit union purchases of banks that the owners of an institution with this track record, financial strength and market position would easily command a price of 1.5 to 2.0 times book value –or up to $300 million in an actual market sale.
Moreover bigger does not mean more success. This merger, like others, undermines the trust that members have placed in their leaders to do the right thing. Without trust there is no foundation for the future.
Into the Valley of Dry Bones
The source of this leadership failure stems from a breach of faith. This is a current example of the old story of the Valley of Dry Bones.. Instead of an organization that is focused on sustaining member welfare, the owners are left with only their separate individual resources.
Their collective future is transferred over to another board and leadership team they do not know, and did not select. They are now disconnected from each other and from their past legacy. Their loans and savings accounts are just a heap of dry bones with no special purpose, history or connection.
These six “leaders” have lost the passionate spirit that cooperatives require to be successful in serving the common good. The eight founders who contributed $40 to gain a charter did not succeed because of their financial capital. They possessed something much more important–the inextinguishable human spirit committed to the success of this singular financial enterprise.—in perpetuity.
And that is what Ezekiel‘s prophecy illustrates by the metaphor of the Valley of Dry Bones: “I will put my spirit within you, and you shall live, and I shall place you upon our own soil.”
The spiritual Dry Bones is about broken connections between people. It also states what is required to put all these bones functioning together again.
When that spirit is missing, this most critical contribution of human capital, the enterprise falls apart. These one-time credit union leaders are now sending their members into a Valley of Dry Bones.