Monday, August 13, 2012

Merger Fees Await MCT's Members

All members of Montgomery County Teachers (MCT) FCU over the age of 22 will be charged a one-time $35 account conversion fee as part of MCT's merger with Educational Systems FCU, the acquiring credit union.

MCT FCU was in financial difficulty and was under an enforcement order from NCUA to complete the voluntary merger with Educational Systems FCU.

Educational Systems justifies this fee by saying that there are significant cost associated with this merger including converting computer systems, utilizing financial and legal professionals, and the financial burden of continuing high loan losses from MCT.

Additionally, Educational Systems says that if MCT had not merged with them it would have cost approximately $184 per member to restore MCT to being well-capitalized. So, the members of MCT should be happy that they are only paying a fee of $35.

Read the information sheet on the merger.

at

4 comments:

  1. David GreenAugust 13, 2012 at 11:29 AM

    I'm a 31-year credit union veteran that strenuously opposes charging innocent members for a merger. If Educational Systems was that concerned about cost, all they had to do is say no. When you merge, you take on all the risk and costs of the merged credit union. There's nothing ESFCU can say to justify their actions. Shame on you.

    ReplyDelete
  2. AnonymousAugust 13, 2012 at 6:02 PM

    Looks like the members are getting screwed without the kiss. $35 per member seems rich for a computer conversion. So they have high loan losses. Does that justify raping the depositors as an offset for the loan losses? Educational CU is going to make this a profitable conversion no matter how much it costs the membership. Why stop at $35? I bet if the members elect to close their account to avoid the conversion fee they will be charged a $35 account closing fee. What a damn rip off.

    ReplyDelete
  3. AnonymousAugust 13, 2012 at 6:07 PM

    So much for the cooperative movement. Ended with H.R. 1151. What is merger accounting entry for Illwill?

    ReplyDelete
  4. AnonymousAugust 14, 2012 at 10:03 AM

    Pen how did you feel when your members paid for the corp mess the last 4 years (and the next 10).
    David, wake up. Your members are paying too.
    Get it yet?
    Is the fee wrong?
    Yes.
    Is it wrong that 4 years later you can't tell your members why their share rate is so unnecessarily low-ie, not due to rates alone?
    We are paying for NCUA supervision mistakes just like the members in ther merger Are paying $35.
    David, if a tree falls in the woods, does it make a sound?
    Der.

    ReplyDelete