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Credit Union Times

MARCH 22, 2017 | VOL. 28 | NO. 9 | CUTIMES.COM

A CEO’s
Merger
Battle
PETER STROZNIAK

pstrozniak@cutimes.com

t’s unusual when a proposed merger is opposed by a group of members. What’s more, A fierce battle of that proposed merger scenario is under way in Pennsylvania.

Some industry leaders contend this consolidation of the $105 million Cornerstone Federal Credit Union in Carlisle into the $453 million Belco Community Credit Union in Harrisburg is an example of a troubling trend of well-capitalized credit union mergers that may not be in the best interests of members. They are also critical of the merger voting process, contending that the mail-in ballots do not provide sufficient information for members to make an informed decision. (Note: See “The Dark Side of Credit Union Mergers” on page 6.)

Dave Keffer, who served as the president/CEO of Cornerstone for more than three decades and retired two years ago, is leading a group of members opposed to the merger with Belco Community.

The group, Committee for Cornerstone Independence, has also hired a lawyer and is exploring options to postpone or block

MANAGEMENT

Y18Y16

redit union executives gathered in Charleston, S.C., in March to rekindle the spirit of cooperation within their ranks.

Two of the leaders of the “Build-
ing Alliances” roundtable came to
the discussion from vastly differ-
ent starting points: Mansel Guer-
ry from a credit union career in
Mississippi, and David Mooney,
whose credit union career began
after two decades with big city
banks.

The roundtable was sponsored by CU24, a Tallahassee, Fla.-based CUSO that allows credit unions of all sizes to be part of a nationwide ATM network. Guerry is cu24’s president/CEO; Mooney is president/CEO of Alliant Credit Union ($9.5 billion in assets, 345,193 members), a Chicago-based member of the network.

Guerry said he decided to organize the gathering because some of the spirit of cooperation has weakened among credit unions in the last 20 years. This will be the third annual roundtable, a handpicked group of credit unions diverse in size and location.

“We see credit unions that are more focused on their own achievements and growth and prosperity: Pushing somebody out of the way so they can get it before you can get it, hold-

VALUES

JIM DUPLESSIS

jduplessis@cutimes.com

Putting More Union in Credit Unions

FIDUCIARY RULE

DOL and Retirement

Will the fiduciary rule give way to frivolous class-action claims brought under the Employee Retirement Income Security Act?

That question is at the forefront of the Labor Department’s new analysis of the rule, ordered by President Trump.

The answer is in the eye of the beholder. Opponents of the rule have long argued it will be a boon for the plaintiffs’ bar; proponents say the rule’s clear guardrails will protect against frivolous claims, so long as firms comply with the new best-interest standard.

The presidential memorandum issued in February instructs the Labor Department to assess how the rule’s private right of action will impact retirement investors.

The department has requested comments on whether an increase in litigation will impact the cost of retirement advice and investments. Regulators also want to know if class-action lawsuits against sponsors of defined contribution plans have been “particularly prone to abuse,” according to the DOL’s solicitation for comments.

Stakeholders who want to see the rule amended or withdrawn can be expected to focus on those questions, said Rob Foregger, cofounder of NextCapital, a provider of automated investment platforms in the institutional and retail space.

“The rule is focused on forcing conflicted advice out of the Y15

Must Reads FOCUSREPORT:
MERGERS

All credit union mergers are initiated with members’ best interests in mind, right? Wrong. Learn about a disturbing new trend in which a well-capitalized merger may not benefit members and instead places the cooperative model in jeopardy, in this Focus Report. Y6