Friday, October 11, 2013

Board Recommends Liquidating CU

The board of directors of Gropaco Federal Credit Union of Groveton, NH is recommending that its members approve the voluntary liquidation of the credit union.

The board made the decision because the credit union faces a business environment where costs are outpacing revenues. The credit union has been unprofitable, since 2008.

The action came after months of deliberations and numerous efforts to seek a merger.

Members are scheduled to vote to liquidate the credit union on October 12.

Read the story.


  1. Nice that the CU's board of directors voted to liquidate in order to do a pro-rata distribution of remaining capital reserves back to account holders when they seek a new financial institution.

    Compare to the typical bank scenario where the bank's board votes to close by selling out to another bank, and the capital reserves are not returned to customers (nor even seen as "their money") but rather used as financial justification for paying off the officers who voted to sell.

    Acceptable self-enrichment motivation is part of for-profit banking. Accordingly, another reason all banks should be taxed differently than credit unions.

    1. Credit union members are not owners, in the same way that bank depositors are not owners...this is because their money is not at risk. When a credit union or thrift member closes her account, she does not get any of the capital.
      Owners put money in as an investment, with some level risk and are compensated for the investment depending on the performance of the management in generating consumer value that leads to more business.
      Members deposit, they don't invest.
      They don't vote for board candidates.
      They don't run for board seats.
      They don't attend annual meetings.
      They don't get and read a prospectus.
      They have nothing at risk because their deposit is guaranteed by NCUA or FDIC.
      When a bank sells itself to another bank, the OWNERS get a premium or a discount to book value which is determined in part, by how well management built a clean and profitable business.
      Owners stand to lose or gain in the transaction. Owners include management , staff, board members and shareholders...this cadre of owner/investors INVESTED their money in the institution. Contrary to Cuna fable, other than a very small part of the funds, the vast majority of funds are invested with the personal funds of the investors.
      Thrift and credit union members deposit with no risk...they're not owners in any manner and demonstrate as such everyday and in any and every opportunity to prove otherwise
      Only Cuna and some CUZ (cu zombies) think otherwise.
      Our board and management understand this, it's odd the fable continues.

    2. Actually, credit union members have liquidation rights, and in the case of our credit union DO vote for board candidates, DO run for board seats and DO attend annual meetings. In addition, they volunteer for supervisory committee seats and know that decisions such as mergers (when not forced by regulators), are also subject to their approval. Perhaps your management and board should spend more time educating your membership on their rights and less time advocating against those credit unions that do. I’m curious, since your members don’t run for board seats or vote for board candidates, where your current board members came from, who elected them and whom they represent. It also begs to question why, if your management and board aren’t willing to make that commitment to your members, you don’t just convert to a bank? Of course, your members will need to approve that first… correct?

    3. If you get around the cu water cooler at all then you know just how silly your post is.
      Any credit union person reading your post knows that in the vast majority of cases, the board experiences almost no turnover, features scant few members at the annual meetings ( mostly staff), and can't get members to act like owners.
      Discussed by industry thought leaders at conferences, managers, board members, advisors, vendors.

    4. Just because a member doesn't act like an owner in your mind doesn't mean they're not owners. So most members don't attend annual meetings or vote in board elections. So what? I'm an AT&T stockholder and don't attend their annual meetings.

      You should tone down your name-calling like calling C.U. people delusional. It makes you sound like an ignorant oaf.

    5. they DONT run for board seats.
      they DONT vote for board members.
      they DONT attend meetings.
      and saying so IS delusional..when everyone knows better.

    6. I’d caution against painting with such a broad brush, as there are many examples of credit unions who do successfully engage their members. Their members DO run for board seats, DO vote for board members and DO attend annual meetings; that’s a FACT. Perhaps the lack of member participation at your credit union is more a reflection of you and your boards’ failure to educate and involve your members, than the industry as a whole. Or, it could just be that you’ve failed to educate yourselves. Here is what’s disconcerting to me, if you’re not going to attempt to commit the resources to educate and involve your members, why remain a credit union? I don’t mean for this post to be disrespectful, but you think you know it all when you don’t, and it’s attitudes like yours that adversely impact the perception of credit unions that do live up to their obligations to their membership.

    7. Me thinks there is a banker pretending to be a credit union, or maybe it is simply another shill from the ABA, or a high-performing credit union wannabe.

  2. Many examples of credit unions engaging members.
    Name them.
    And the % of members that attended last annual meeting and the % that voted for last new board member.
    Name them.

    1. You sound like a very angry person. What possible difference does all this make to you? Will your life be significantly better if credit unions are taxed? Maybe you should stop reading this blog and get some sunshine.

    2. Appreciate you checking in on my happiness and suntan.

      Name them.



The content is provided for educational purposes only, with the understanding that neither the authors, contributors, nor the publishers of this site are engaged in rendering legal, accounting or other expert or professional services. If legal or other expert assistance is required, the services of a competent professional should be sought.

Comments appearing in response to articles appearing on this site do not necessarily reflect the views of the ABA. ABA makes no representations regarding the truth or accuracy of commentary or opinions that may be posted in response to the articles that appear on this website.

The inclusion herein of any link to a website, either in the text of an article or in a comment, does not denote any approval, sponsorship, or endorsement by the ABA, and ABA is not responsible for the content or opinions expressed on those linked websites or related commentary. This content is not licensed to third parties sites and is not affiliated with any third party site. Any reference to the author or this content on any third party site on the Internet is not authorized by the ABA.

It is the policy of the American Bankers Association to comply fully with all antitrust laws. Certain discussions should be considered off-limits, including those that contain competitively sensitive data such as price and cost information, or statements that could be construed as reflecting an attempt or desire to control or influence a particular market or markets. Future pricing or other prospective competitive information should never be shared.