Plans on the part of a credit union, the largest in Michigan and reportedly a major mortgage lender, to convert to a savings and loan have been dropped, the company said today.
Dearborn, Mich.-based DFCU Financial, a credit union with $1.8 billion in assets, has withdrawn its application to convert itself to a savings and loan, the company said.
DFCU, which has membership closely tied to the auto industry, had hoped to protect its long-term prospects from the decline in the sector by turning itself into a mutual savings bank still owned by depositors, eventually selling 49 percent of the bank to the public, reports said. It would have been the nation’s largest credit union conversion, reports said.
The credit union, which sources said is “primarily a mortgage lender,” said in a statement that it made the decision based on “member feedback.”
“The DFCU Board of Directors made this decision based upon member feedback and the level of misinformation that has resulted from the communication constraints imposed by the prescribed regulatory conversion process,” the credit union said in the statement.
“Our first priority is the members of DFCU,” said Harold Lowman, Chairman of the DFCU Board of Directors. “Our overriding objective in putting forth the proposal for charter change has been to ensure that our members are able to make a fully informed decision. Unfortunately the limitations of the process have made it impractical to fully inform members. Further, the result has been unnecessary confusion and concern among our members.”
Members of the credit union have created a Web site, DFCU Owners United, regarding the company’s decision to covert.
“We are extremely concerned about a recent decision by the executive management and board of directors of DFCU Financial to begin the process of converting from a not-for-profit credit union to a for-profit mutual savings bank,” the Web site says.
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