Credit union's shift to bank opposed

DFCU argues it wants to grow
BY KIM NORRIS

February 18, 2006

The state's largest credit union's efforts to convert from a not-for-profit, member-owned financial institution to a for-profit savings bank are fought by the lobbying group that represents the state's credit unions.

The conversion by DFCU Financial -- formerly Detroit Federal Credit Union -- is the largest undertaken nationwide. It has galvanized the Michigan Credit Union League and some former employees of the credit union to oppose the effort.

DFCU said it wants to convert to a mutual savings bank to ensure its future growth, which is constrained by its charter and the local economy.

Customers would have access to more locations and products, such as real estate and commercial loans, and would be able to buy ownership in the new bank, DFCU officials say.

"We're completely captured in the Detroit metro market," said Mark Shobe, chief executive of DFCU. "We have no interest in abandoning the market, but we'd like to diversify."

Opponents of the conversion claim credit unions pursue conversions simply for the enrichment of insiders and that members benefit little from such moves.

"Their arguments ring hollow," countered David Adams, chief executive of the Michigan Credit Union League, the trade group for 350 credit unions, representing 4.4 million members....for more of the story from Detroit Free Press