Yesterday I posted a 3,000 word analysis of the proposed merger of Spirit Financial in Levittown, PA with Credit Union 1 headquartered in Lombard, IL.
Included in the analysis are the reactions of two Spirit members from NCUA’s website:
Member Brian Stuart comment: I am voting against the proposed merger of Spirit Financial Credit Union with Credit Union 1. Credit Union 1 is based in Lombard, Illinois. All of its branches are in Illinois. There is no advantage to the Spirit Credit Union member to merge with Credit Union 1. Merging with Credit Union 1 would take away the local Bucks County focus of Spirit Financial Credit Union, which should be its mission. . .
Member Joann Glasson: As a long-time member of Spirit Financial Credit Union, I am sad to see this merger occur when the CD rates are so much lower at Credit Union 1 and the loan rates are so much higher at Credit Union 1.
We are retirees with large deposits at Spirit that we will be forced to move if the merger is approved. This merger is not a service to the members of Spirit Financial Credit Union
Due to the article’s length, I sent the following summary to the press:
$9 MILLION IN LEVITTOWN COMMUNITY WEALTH TO BE GIVEN AWAY – CREDIT UNION CEO WOULD RECEIVE $4.4 MILLION
Spirit Financial Credit Union, a strong and profitable 72-year-old community institution, is being absorbed by Credit Union 1 of Illinois (pending a member vote) and in the process, Levittown’s families will lose nearly $9 million in community-built capital, while Spirit’s CEO personally will walk away with more than $4.4 million in payouts and benefits. Member balloting on this proposal ends Dec. 22.
Spirit Financial isn’t struggling — it is thriving:
- highly capitalized,
- financially stable,
- outperforming peers,
- and the only locally headquartered depository institution serving Levittown.
Yet in a quiet, opaque merger, every dollar of the members’ accumulated equity of approximately $9 million will be transferred to an out-of-state institution for free:
- No payouts to Spirit Financial member-owners
- No equity retention
- No bonus dividend
- No local control
- No sole ownership
Levittown’s families built this wealth, and now it’s about to go away.
Meanwhile, the Spirit CEO who championed the merger receives:
- A massive cash bonus at closing
- A guaranteed five-year employment contract
- Incentive packages to solicit more mergers
- A fully vested multimillion-dollar retirement package, all totaling more than $4.4 million in personal enrichment.
Community wealth will be removed, assimilated, and relocated, while ordinary member-owners will be left with nothing.
Control of Levittown’s financial legacy will shift to a board in Illinois that is unreachable, unelected, and governed by mechanisms that dramatically limit member democracy.
This is not an isolated incident. Credit Union 1 has initiated over 20 such mergers in just 3½ years, importing hundreds of millions in community assets and capital and using merger accounting to mask weak operating earnings while expanding its asset base by taking over independent, strong local credit unions.
This development raises urgent public questions:
- How can a member-owned institution be sold without any benefit to its owners?
- Should executives be allowed to personally profit from the liquidation of community capital?
- Where is regulatory oversight when cooperative ownership is silently dissolved?
- Which Pennsylvania credit union will be targeted next?
If this were a stock corporation or public company, shareholders would be compensated, and regulators would not tolerate uncompensated transfer of equity. But cooperative members will receive no payout, no recourse, and diminished legal standing.