DFCU Owners United Responds to DFCU Financial's "Smear and Fear" Campaign

Credit Union's Tactics Leave Members Confused and Frustrated

More than 1,700 member-owners of DFCU Financial who signed petitions to call a special meeting of the credit union for the purpose of removing the board of directors have been stunned by the credit union's attempt to discredit its own members, including former board members.

"We moved ahead with calling for the special meeting, because a large number of members urged us to do so," said Gary Wolas, a member of DFCU Owners United, a group that was originally organized to inform members about the conversion. "The response from the credit union's board and management has been to lower themselves to the worst possible level of misinformation, lies, personal attacks and smear campaigns."

According to Wolas, employees were requested to write letters to the editors based on false information that was given to them by management. This included allegations that DFCU Owners United was largely made of up disgruntled former employees and board directors who had mismanaged credit union funds; that the group wanted to close any branches outside Dearborn and eliminate member services such as investment representatives; and install its own slate of inexperienced members on the board of directors.

During the past few days, several DFCU Financial members have reported receiving anonymous letters that were mailed in first class, hand stamped envelopes without any return address. The letters included a small post-it note with a handwritten message that said "a small example of what employees think."

"It appears the employees are scared to death of losing their jobs and have been convinced that this will happen if the board of directors is replaced," said Wolas.

In addition, DFCU Financial has established a separate website and distributed bright-colored fliers in the branches that urge members to "Protect your money, save your credit union" and to vote "no" to the recall. One line on the flier said that "by attempting to remove the Board, your money could be in jeopardy."

"To instill fear in employees about their jobs is bad enough, to instill fear that members' savings are in jeopardy is an outright lie," said Dick Sly, a former board member. "I am sure the National Credit Union Administration, the U.S. government agency that insures members' deposits up to $100,000, will have something to say about this."

Taking the brunt of much of DFCU Financial's smear campaign is Linda Malec, former board chairman and a spokesperson for DFCU Owners United. She finds it interesting that her record as board chairman has been maligned by current board members who served with her.

"Instead of the board and management attempting to rebuild trust with members and be forthcoming with information about the conversion attempt, they are running scared by using fear tactics and trying to shift the focus and blame on anyone else they can," added Sly.

In accordance with the bylaws, DFCU Financial member-owners will have the opportunity at a Special Meeting to decide whether the board should be removed. There is a formal process to be followed. The chairman of the board of directors of DFCU Financial must call a special meeting within 30 days of receipt of the written request, which was submitted on April 18, 2006. Written notice of the meeting must be given to each member at least seven days before the date set for the meeting.

Each director named in the notice will be given the opportunity to be heard at this special meeting. The members present at the meeting will then vote on whether or not to remove the directors.

In the event that the entire board were to be removed, the credit union's supervisory committee would immediately become the temporary board of directors and, as such, would be required to call a special meeting of the members for the purpose of electing an interim board. Such special meeting must be held not fewer than 7 nor more than 14 days from the removal of the board after giving notice of the meeting to each member. All directors elected at the special meeting may only serve until the next annual meeting when a new board would be elected.

DFCU Owners United continues to receive scores of comments from members and now anonymous emails from employees. It has pledged to continue working to raise member awareness through ads, signage, and its website www.savemycu.com. The group also welcomes member-owner comments addressed to DFCU Owners United, P.O. Box 511445, Livonia, Michigan 48151.

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