Making a pledge to members in 1997 that Cascade FCU, Seattle, has no intention of merging with another financial institution Dale Kerslake, CEO, promised to pay members $100 if the CU merged and as a result changed its name, a member’s account number or closed a member’s primary branch within a five-year period. Six years and counting and there’s no payout in sight.
Kerslake got the No Merger Idea while in the hospital recuperating from a broken leg. Maybe I had too much time on my hands, but I’d seen way too many banking mergers, and people were complaining. Then, Kerslake was committedto offering a stable alternative to banks, but these days he’s fuming about credit unions converting to mutual bank charters.
Two credit unions in this state have already converted and two more have announced their intention to convert (29 have started the switch, nationally. I’m sick about it and I just don’t get it except to conclude that it’s about greed,plain old greed, he said. Here in Washington, we happen to have a very good field-of-membership policy, so it doesn’t make sense (except as a management profit motive). You can’t convince me that members get benefit from theseconversions! Management becomes wealthy, however (through later IPO stock offerings).
Kerslake feels strongly that if a CU does convert, there should be a proper distribution of capital. I’m tired of seeing credit unions starting to think like banks. I think these conversions are a real danger, a threat, and we need to standup to them, and to those that push them. He acknowledged that the Seattle metro area had plenty of CU competition, given the large number of community charters.
Kerslake has even devised a neat way for Cascade ($150 million-in-assets, 11,000 members and 10% capital, www.cascadefcu.org) to benefit from a former CU’s philosophical stumbling: by taking in their formerselect employee groups. In 1982, when Columbia CU (no longer a CU) got its community charter they started charging employees of Burlington Northern (one of the SEGs that originally started the Columbia) to cash their paychecks, Kerslakesaid. Some of the founding members approached Cascade and asked us to open a branch to serve them and we did. It’s one of our most successful branches.
More recently Cascade signed up a much larger SEG, Goodrich Aviation Technical Service’s 1300 employees, a part of Goodrich Aerospace, which was formerly served by Western Credit Union. I’ll cherry pick as many of these disenfranchised SEGSas I can, said Kerslake.