News
Local Credit Union CEO responds to Culpepper's letter: says Culpepper not telling his members the whole story (5-10-08)
Added 5/12/2008 2:23:33 PM
Credit unions sprang from humble roots
May 10, 2008 - 7:15PM
BY: Louise Smith, President Permian Basin Credit Union - Odessa
After reading Shem Culpepper's letter in the April 20 Public Forum section of the Odessa American, I am compelled to respond.
Culpepper has taken an effort for improving credit unions' ability to better serve their members and turned it into an attempt to discredit and spread doubt about credit unions in order to prop up his argument to convert First Basin CU to a bank.
Culpepper let everyone know that his credit union could only hold up to $16 million in business loans under the 12.25 percent cap.
While that is true, he did not tell you that currently First Basin CU has only $5.3 million in business loans. Therefore, he can triple his holdings before hitting the cap.
That is assuming First Basin CU does not grow at all. In fact, First Basin grew 13 percent in assets during the first quarter of 2008. If First Basin continues to grow at that rate, it will be able to add $7 million a year in business loans to its portfolio. It only added $3.3 million in business loans last year, so I think it has room to grow.
Culpepper spoke of credit unions being taken into conservatorship due to bad business lending practices. Just for the record, credit unions rarely fail.
In fact, most credit unions nationwide are growing and prospering while many banks are reporting record losses due to overly aggressive auto and home lending practices.
As to the recommendations from the U.S. Treasury about consolidating all financial services under the Federal Reserve, Culpepper failed to say that leaders in the U.S. Senate rejected that suggestion right after it was made and it is effectively dead.
Credit unions serve a vital purpose in our community, which is often very different than that of a bank. For instance, credit union roots are in auto, home, personal loans and other services that help individual members. And they can make all of those types of loans that they wish.
Savings banks have some very tight restrictions on the dollar amount of those types of loans they can hold.
I, for one, believe in credit unions and the "people helping people" principle. And I believe that credit unions will continue to grow and thrive.
If Culpepper wants to see pioneering spirit, he needs only look at credit unions. Each of them has a story of how they were started in a company breakroom or in someone's living room. The founders of credit unions demonstrated pioneering spirit and innovation matched by few people.
Louise Smith
President
Permian Basin Credit Union
Odessa
Read it here on the Odessa American website
Letter to the OA Responds to Culpepper: "What is First Basin doing?" (5-3-08)
Added 5/12/2008 2:14:51 PM
What is First Basin doing?
May 3, 2008 - 6:59PM
BY: Martha Hulsey - Odessa
I am curious why the management of First Basin Credit Union continues to try and make the case for conversion to a mutual bank when they have already announced their intention not to do so.
The president/CEO of First Basin, Shem E. Culpepper, stated in his letter-to-the-editor that First Basin was unable to compete for commercial loans because of the percentage of assets cap on such loans at credit unions.
Credit unions are financial institutions formed by an organized group of people with a common bond.
Members of credit unions pool their assets to provide loans and other financial services to each other. They are designed to be an avenue for financial services, like checking/savings accounts as well as consumer loans, such as car loans. Because their focus is to help each other without profiting from such relationship they are a not-for-profit organization and are accordingly exempt from taxes on earnings. A bank is a very different kind of business, designed to provide more expansive credit services for the purpose of providing a maximum return to its shareholders. Because of this profit incentive, it is a taxed entity.
I do not believe the people who started First Basin intended it to become a financial powerhouse, but merely to be an economical way to handle their personal financial affairs. If a person wanted to do business with a bank, then they could simply go down the street to any number of banks in Odessa and surrounding communities.
The legislation before Congress providing for an increase in the lending cap for credit unions is drawing fire from banking groups who claim if you allow direct competition between banks and credit unions for commercial loans, then credit unions have a serious advantage because they are not taxed.
This makes a lot of sense when you consider the purpose for credit unions.
Credit unions came into existence in the United States in 1908. Credit unions are not the cause of today's housing and credit crisis; in fact they have drawn extensive praise from the media and policy makers for their performance and willingness to help consumers in troubled times. Unchecked greed is the basis of every financial crisis we have experienced as a nation. Since profit is not the motive for the formation of credit unions, they are the only financial institutions which have never required government assistance or rescue. In fact, they have been a source of help for consumers during the Great Depression, the SAL crisis or any other turbulent economic period in our nation's history.
Mr. Culpepper bemoans the fact First Basin is unable to take full benefit of the present boom in commercial lending in West Texas. However, anyone who has lived in West Texas for any length of time knows, the bust always follows the boom. Many local banks and savings and loans went under in the 1980s, but interestingly no credit union, including First Basin, did.
I was considering opening an account with First Basin but because of the lawsuit by the management against persons opposed to the conversion and the allegations of self-interest against the board, I am holding off. On the First Basin website, a letter is posted by the board chairman, which states the plans for conversion have been permanently abandoned and First Basin will remain a credit union. I guess time will tell the board's true intentions.
Martha Hulsey
Odessa
Read it here on the Odessa American website
Another Member writes to the OA after April 15th Meeting: I have Lost Faith in FBCU Leadership (4-26-08)
Added 5/12/2008 2:09:17 PM
Time for a credit union to move on
April 26, 2008 - 7:56PM
BY: Linda Shortes - Odessa
Re: The annual meeting of the First Basin Community Credit Union.
I must say this, if I had not lost faith in the direction and leadership of our credit union board of directors and CEO before that meeting, it was certainly lost by the time I left.
It was far from being a democratic process and more on the side of being orchestrated by Shem Culpepper and his employees.
Yes, there were people who were fed up with Culpepper's hour-long diatribe and accusations implying those who oppose the board's plan to convert were lying, devious, uninformed or misinformed.
The members had heard it all before through costly mailouts, recorded phone messages and mouth-to-mouth from members.
We did not come to hash over a moot subject nor did we want to hear him justify the board's recent actions.
Not all of us there were members of the "Save First Basin," nor did we support the actions of our board of directors. But we do believe that we were held captive for an hour and forced to listen to something that we had already heard just to give Culpepper and the board an extra chance to smear opponents and then deny them a chance to respond.
I was further shocked at people yelling out of order against what Shem was saying, but they were quickly called to order. But those in support of his speech applauded and squealed like banshees and were allow to continue in their disorderly conduct.
The louder these employees and their families screeched, the more animated Shem became. Why at one point he took on the persona of an old-time Gospel evangelist. I could almost hear the heavenly choirs sing! My God I thought ... the whole room is going to convert!
It would have been comical if it had not been so blatantly orchestrated and manipulated by Culpepper and his coworkers.
Several members learned for the first time, myself included, that if you have a spouse on an account with you, only the primary account holder gets to vote. The explanation of why made sense to me. But I was appalled that when asked about this, when we were told, "Oh, you can each get a vote by separating your accounts and opening your own." A little too late to be sharing that information, don't you think?
Now, I wonder how many of the credit union employees/members and their families did exactly that before the meeting? How many of those 300-plus votes were ascertained by exactly that method, a method they somehow failed to pass on to the rest of the members.
No sir, that vote does not reflect that the board has more support than anyone in the community thought. Nor does it show that a small radical group was able to manipulate a lot of people, unless that small radical group is the employees and the board.
It spoke volumes of just how manipulative and unethical some people can be and they will do anything to remain in control so our credit union can be turned into a money-making machine for big business.
The fact that the credit union management sent out notices announcing the meeting to some, but not all members was devious and manipulative. I did not receive one and I have been a member since 2004.
I was opposed to the conversion, not because of influence from the small radical group as was claimed, but because credit unions have always been my vehicle for financial business since the 1970s and because they are member-oriented. I no longer feel that First Basin is a member-oriented credit union especially after that meeting.
I listened to what Culpepper had to say, and I wonder if anyone else heard what I heard? They couldn't have; they were too busy squealing.
We were repeatedly informed the credit union was almost at the limit or passing the legal level of commercial loans. Again, I thought a credit union is for the benefit of the individual members. It was started by and for the employees of the medical community and the county.
Who cares if we can't continue making loans that will support companies? The credit union is for the individual members/employees of the different entities that make up that credit union, to allow them easier access to loans and financing - NOT keep companies in business.
Does it really matter in the long run that the National Center for Member Trust is behind Save First Basin and is under investigation. Does it matter that it has waged lawsuits in the past? I don't know if Save First Basin got its information solely from National Center for Member Trust, nor do I care.
What Culpepper and the rest of the board seem to be missing is that a lot of members did not want to convert. How they researched and how they gathered their information to fight against the agenda has no bearing on the fact that the members of a credit union wanted to remain a credit union not a bank.
My fear is that after experiencing the meticulously orchestrated control of that meeting, that management's agenda to convert has not been put to rest.
Calling members who wish to remain a credit union a small radical group manipulating others is shameful, especially when to change from a credit union to a banking system is just as radical and those methods just as manipulating.
Furthermore, what company in their right mind allows a board member to also be the CEO? Is that asking for trouble?
Well, you usually get what you vote for. Members voted for this mess and I hope it ends well for them.
For myself, I will be shopping for a real credit union that understands the purpose for its existence.
Linda Shortes
Odessa
Read it here on the Odessa American website
Member Letter to the OA: Meeting was "worst example of abuse of power in a public forum I have ever witnessed." (4-30-08)
Added 5/12/2008 1:44:07 PM
A bunch of propaganda
Comments 0 | Recommend 0
April 30, 2008 - 10:00PM
Although the Odessa American article describing the recent annual meeting of the First Basin Credit Union implied that the meeting was conducted fairly, it was, in fact, the worst example of abuse of power in a public forum I have ever witnessed.
Before actually calling the meeting to order, Shem Culpepper launched into a skillfully prepared propaganda campaign of innuendo, red herring logic and unsupported accusations designed to poison the audience with the idea that anyone questioning him was being "misled by a radical group from North Carolina." This tirade went on for 45 minutes with no questions allowed from the floor and no opportunity for anyone to defend themselves or challenge the flawed logic.
As the final slide flashed on the screen showing how the credit union had grown under his leadership, he leapt across the stage pointing at the screen and shouting something about his stellar performance as CEO to wild cheers and applause from his supporters.
The message was very clear - Culpepper and the board were being attacked by "radicals," and he was not going to allow them to destroy the credit union!
The crowd was so inflamed by Culpepper's performance that any hope of an actual discussion of real issues ended before the meeting was called to order. Members have legitimate questions that deserve answers, including:
>> Why was the meeting scheduled for April 15? This was the least convenient workday of the entire year since many members were finalizing their tax returns and could not attend. Credit union bylaws actually require the meeting to be held at a time "convenient to the membership." Did Culpepper not want members to attend?
>> Why was his "report" to the membership given before the meeting was called to order? Why was the agenda reordered without the consent of the membership? These are both obvious violations of Robert's Rules of Order. If the rules had been followed, the parliamentarian would have been forced to protect members' rights to raise questions about the "report."
>> Why did the conversion proposal include a change in voting rights from one vote for each member to votes based on the amount of money in a member's account? Credit union conversion to a mutual savings bank is typically the first in a two-step process to ultimately convert to a stockholder-owned bank. Culpepper has stated that this second conversion would require a second vote and could only proceed if members wanted it. However, changing the voting rights in this way would allow a few wealthy investors to open large accounts, then use their new voting power to continue the conversion process regardless of what the majority of members wanted.
>> Why did Culpepper cite one example of FBCU CD interest rates being driven by "market forces" and use that example to suggest that interest rates would not be adversely affected if the credit union converted to a bank? According to a comprehensive Government Accounting Office study of 6,000 credit unions and banks, interest rates on loans are higher at banks and interest rates on savings are higher at credit unions. Data clearly suggests that conversion to a bank would adversely affect interest rates offered to members. This conclusion is confirmed in an independent study by researchers at the University of Wisconsin. The facts are very clear on this point.
>> Why did Culpepper spend so much time proving that the Save First Basin website is virtually identical to another website, then use that as "evidence" that the members of Save First Basin had been misled by a "radical organization?" That the websites are very similar does suggest a connection, but perhaps they both state the truth and the truth just doesn't change much. Culpepper never provided evidence of any misleading information on the websites.
Why the fear of questions and debate? Why the misleading report? Why the attacks? Why the manipulation? Respected economist James Wilcox at UC Berkley is an expert on credit unions. He's easy to find online and his webpage has links to several of his publications explaining the credit union conversion process clearly and objectively. I recommend looking there for answers to some of these questions.
Based on my experience, asking Culpepper will only produce more spin.
Tom McKelvey
Midland
Read it in the Odessa American here
Culepper Letter to OA suggests he may try to convert FBCU to a bank again (4-19-08)
Added 5/12/2008 1:40:12 PM
In the letter below, FBCU CEO, President, and now Chairman of the Board Shem Culpepper brings up why FBCU needs to convert to a bank... again. Here's what we think: We voted on this once. The members have spoken, and it appears we want to keep our credit union. Mr. Culpepper should get back to running our credit union as the member-owners have asked, or go find a bank of his own.
Mr. Culpepper's letter:
---------------
Restrictions hamper credit unions
Comments 1 | Recommend 10
April 19, 2008 - 10:21PM
BY: Shem E. Culpepper - President and CEO - First Basin Credit Union
The Odessa American ran an editorial in the April 9 edition regarding restrictions that preclude credit unions from fully participating in the business lending arena.
Thank you for recognizing this regrettable obstacle as one that prevents a community-focused institution from doing all it can to serve the local economy.
Those who observed the recent attempt of First Basin to convert from a credit union to a mutual savings bank will remember we cited harsh business lending restrictions as one of the key reasons for the need to convert.
How could First Basin find relief as a mutual savings bank? Unlike credit unions, mutual savings banks have significantly higher business lending caps.
If properly structured, as a savings bank, First Basin's business loan portfolio could expand from its current $16 million cap to $72 million ($26 million secured or unsecured business purpose and $46 million nonresidential real estate). Yes, you read correctly. The credit union limit is $16 million while the mutual savings bank limit is $72 million.
The OA reported that recently introduced legislation in the form of HR 1537, the Credit Union Regulatory Improvement Act (CURIA), if passed, would increase the current 12.25 percent limit to 20 percent, thus providing much needed relief.
It is important to know that this is not CURIA's first attempt. CURIA has been introduced twice before, as HR 3579 in 2003 and HR 2317 in 2005, each time dying on the House floor.
In fact, credit unions were promised their business lending restrictions would be remedied in the first congressional session following the 1998 Credit Union Membership Access Act, when the industry grudgingly accepted the lending restrictions in order to preserve membership expansion provisions. The industry has unsuccessfully sought relief for the last 10 years, and there is simply no reason to believe that this year will be any different.
CURIA has been portrayed as a magic bullet. However, the problem goes beyond the 12.25 percent limit. Along with the total commercial loan cap of 12.25 percent, credit unions are further limited to total construction and development loans of only 15 percent of capital (net worth).
Readers of the OA are well aware of the extent of construction and development activity in the Permian Basin, thus know well that there is tremendous demand for commercial real estate financing. With a limitation of 15 percent of net worth, First Basin continually pushes against the cap.
In fact, because of the size of most commercial construction projects, First Basin's commercial construction and development portfolio growth has effectively stalled at around $400,000 below the regulatory limit. We have been forced to turn away attractive commercial construction projects, sending them to competing banks that have no such arbitrary limit.
Even if CURIA became law, it is not an adequate solution to credit union's business lending restrictions. For one, CURIA does not address the construction and development limit of 15 percent of capital, which, as reported earlier, is a severe restriction.
Secondly, increasing the cap from 12.25 percent to 20 percent is nothing more than a Band-Aid, only prolonging the root of the problem.
For example, it would allow First Basin to expand business loans from the current $16 million limit to only $26 million. Based on our current growth trends and estimates, the increase would simply permit First Basin to postpone the problem for about one to two additional years. Then, we would be right back to where we are today, an institution unable to fully participate in business lending.
The credit union industry faces problems even CURIA cannot address. Recently, its national regulator was forced to take three credit unions under conservatorship, and set aside reserves of $180 million, because of a business lending fiasco in Florida. Is it reasonable to expect Congress to grant expanded powers when the industry can't regulate the authority it has now?
Furthermore, recent recommendations from the U.S. Treasury Department to consolidate all financial services regulation under the Federal Reserve would see the elimination of the credit union charter and its separate deposit insurance fund. This leads to wonder what the future has in store for credit unions at the most fundamental level.
Innovative banking institutions are often ahead of trends. Through its attempted conversion, First Basin showed a pioneering spirit - that it would do what it takes to survive and thrive. Those who spoke against the conversion fail to understand the bigger issues behind our strategy.
Shem E. Culpepper
President and CEO
First Basin Credit Union
-------
Reader Comments:
dtanner wrote:
Mr. Culpepper is insisting that those who opposed his attempt to convert the credit union to a Mutual bank "fail to understand their strategy".( exact quote: Those who spoke against the conversion fail to understand the bigger issues behind our strategy.)
I have spent over 30 years in banking and managing credit unions much larger than First Basin and I'm worried that I might indeed understand part of their strategy.
In many cases where credit unions have converted to mutual banks (even in Texas), it was only a matter of time until the leadership again converted them from mutual ownership to stock ownership with the credit union's management and Board of Directors gaining the biggest share of the new stock through granting themselves options to buy it at very low prices. These former credit union leaders have made themselves a great of money at the expense of the former credit union's membership.
Given the state of the Real Estate industry today, Mr. Culpepper should thank his lucky stars he wasn't loading up on Real Estate loans for the past 12 months.
http://www.cutimes.com/article.php?article=37936
4/23/2008 9:03:32 AM
Recommended (2)
Read it here on the Odessa American website
Credit Union Journal: FBCU CEO also on Board of Directors, did not tell members (4-21-08)
Added 5/12/2008 1:31:09 PM
Dual CEO Roles Cause Confusion at Failed Convert First Basin CU
Credit Union Journal | Monday, April 21, 2008
ODESSA, Texas – Members seeking to recall directors involved in the failed conversion of First Basin CU to bank were surprised to find they wouldn’t be told which three directors were up for reelection at last week’s annual meeting until immediately before the ballot.
None of them were told before the meeting that two of the directors were Vice Chairman Annette Snowden and Chairman and CEO Shem Culpepper, the two main drivers in the failed conversion. So it came as a surprise that the challengers–all members of the group opposed to the conversion–were only allowed to give three minute speeches after Culpepper had already spoken for an hour as while he was conducting the meeting.
The unusual dual role for Culpepper, though permissible for both state and federal credit unions, caused some head scratching among the losing candidates for the board.
"There’s got to be something wrong with that, I mean, he’s running the meeting as both the CEO and the Chairman of the Board," said Danny Armstrong, one of the losing candidates, who represented Save First Basin CU, the group that defeated the conversion to bank. Armstrong found it particularly frustrating because he said the fact that Culpepper was one of the directors running for reelection was not announced till right before the vote.
None of the names of the three incumbents running for reelection was listed in written materials mailed to members, or that a board election was being held at the meeting.
With a heavy attendance of credit union employees, the three incumbents easily won reelection at the meeting.
Credit unions officials did not return phone calls.
Credit Union Times on April 15th Annual Meeting (4-23-008)
Added 5/12/2008 1:27:08 PM
Incumbent First Basin Board Members Retain Seats After Boisterous Meeting
April 23, 2008
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By David Morrison
ODESSA, Texas — After a long and controversial lead up to the First Basin Credit Union annual meeting, members opposed to the attempted conversion to a mutual bank failed to unseat three board members who had supported the conversion.
The $115 million credit union filed an application to become a mutual bank and then suspended the balloting in February before it was complete, alleging that opponents of the move had been lying to other members about the proposed conversion. The credit union then delayed announcing the date of its annual meeting where some board members were up for re-election. The CU in a legal action has sought to depose the members who helped organize the opposition group, Save First Basin.
Those depositions have been scheduled for April 22.
According to CU members who attended the meeting and local press accounts, about 500 people attended the April 15 meeting, many of whom were either employees of the credit union or their family and friends. Local press accounts stated that 414 people voted in the election with each of the three incumbents drawing at least 300 votes. The highest vote count for one of the challengers was 87.
“I remember about 30 minutes into [CEO Shem Culpepper’s] hour-long attack on Save First Basin, on the Member Trust group, and me by name, when their supporters were all clapping and yelling, I passed a note to a buddy of mine about how they have the numbers at this meeting,” said Danny Armstrong, a First Basin member and a Save First Basin supporter who was also a candidate for the board.
Armstrong is the husband of Tammy Armstrong, a vice president with another CU in the area, a point that Armstrong said drew a comment from at least one person about potential conflict of interest. Armstrong snorted at the memory of the comment, noting that the members of the CU were not told which board members would be up for re-election or even that Culpepper was on the board at all.
“That sounds like a huge conflict of interest to me,” Armstrong said. “How can a guy be a member of the board that has the power to hire or fire him and then have that board make those decisions,” he asked.
Armstrong said that the board members had been unprepared for Culpepper to be on the ballot and suggested that he was such a polarizing figure with members that if members had known they could have voted him off the board, the meeting attendance and voting might have been very different.
“We arrived expecting to vote on three board positions from a seven-member board, with the other four sitting out because this was not their year,” Armstrong explained. “I was floored when I found out that Culpepper is on the board. It turns out there were eight board members after all.”
Culpepper’s name had not appeared on any other listing of board members that had been shared with members, Armstrong said.
Armstrong also recounted that the ballots were not anonymous in that each ballot had the account number of the member stapled to it. When members questioned this, the parliamentarian the CU hired to conduct the meeting told them that there was no provision in the bylaws for anonymous balloting at the meeting.
According to NCUA data, as of the end of last year First Basin had 77 full-time and part-time employees and both Armstrong and Letty Moreno, one of the organizers of the Save First Basin member group, estimated all the employees attended the meeting with their family and friends to help pack the voting.
“You had to figure they had their network of supporters as well,” Armstrong said, “family and friends and folks who were associated somehow with the board members. And of course the turnout could have been different if members had known about Culpepper being on the board and up for re-election.”
First Basin did not return phone calls or e-mails asking for comment on any part of its handling of the conversion application, balloting or subsequent controversy.
But both Armstrong and Moreno recounted the hour-long diatribe against the Save First Basin members that Culpepper launched, without offering any time for rebuttal, before the meeting was ever formally called to order.
“The meeting was scheduled for 7:00 but didn’t get formally underway until 8:02,” Armstrong said. “That entire hour was all Culpepper attacking us, attacking the Save First Basin site and attacking the Member Trust [National Center for Member Trust] organization,” he said. “Whenever anybody tried to offer a defense or another point of view or anything in opposition to what he was saying, he called them down or insulted them or told them they were out of order,” Armstrong said.
“The entire thing was really just one long attack,” said Moreno, “with no chance for discussion or debate. It was incredibly unprofessional.”
Armstrong, Moreno and press accounts recounted that Culpepper devoted a significant part of his attack to making the case that the group was being manipulated by the NCMT, at one point citing the similarities between the Save First Basin site and the site of members who opposed a successful conversion attempt at the $186 million Beehive Credit Union, headquartered in Utah.
But Armstrong countered that whatever similarities their might have been between the sites could be expected since both sites were formed by credit union members who opposed their credit unions becoming mutual banks. Since the challenges were the same, Armstrong pointed out, it would not be unusual for the objections to be similar.
“There was an undercurrent running through [Culpepper’s] comments that we were just not smart enough to have decided on our own that we wanted our credit union to remain a credit union,” Armstrong said. “It was really pretty insulting.”
The emotional meeting came on the heels of a long series of controversies that arose after the CU stopped the balloting and then withdrew its charter change application. In addition to the delayed annual meeting and the deposition of members from Save First Basin, the members also announced they had filed a petition to depose Culpepper and Board Member Annette Snowden.
“Petitioners would further show that Culpepper and Snowden made such comments as SAVE First Basin were ‘puppets’ for the National Center for Member Trust,” and that “they basically don’t want to see this credit union to succeed,” the members said in their legal filing.
“Mr. Culpepper also allegedly stated that legal action was needed against SAVE First Basin Credit Union because ‘SAVE First Basin had not been cooperative in providing information.’ Furthermore, Culpepper allegedly stated Save First Basin leaders engaged ‘in a scaremongering stew of lies, misrepresentation and innuendo.’ Further, SAVE First Basin made a ‘constant stream of false and misleading information.’ At best, the statements are derogatory, and at worst, they are actionable,” the filing added.
The members received a fair amount of media attention as well. A press conference called to highlight the coming annual meeting and announce their legal filing drew three out of the four local television stations as well as the local newspaper. The members also were the first to use an airplane to try to help draw member turnout and attention to their efforts. Pooling their money, some Save First Basin supporters hired a plane to carry a banner for two hours in the skies over Odessa on April 13.
Moreno said the members had hired the plane and chosen the time for it to fly in the hopes of catching residents on the way out of church or to a meal out afterwards. The banner read “First Basin Vote Tues! SaveFirstBasin.com.”
—dmorrison@cutimes.com
Member writes OA Letter to Editor: FBCU Sneaking is Rediculous. Right is right and wrong is wrong. (4-15-08)
Added 5/12/2008 1:21:59 PM
The Members Matter
Comments 0 | Recommend 2
April 15, 2008 - 10:00AM
Lee Winters | Odessa
I'm a one-man company and have done business with First Basin Credit Union for about 10 years.
I've been doing a lot of thinking about the issues surrounding the credit union, the attempt to convert to a bank and how some things just don't add up.
Take, for instance, the name change. Why throw away a perfectly good name, which has served the institution well in the past, for a completely different name? The board members never asked the members what their opinion was on changing the name of the credit union. They just did it. Doesn't add up, unless you are paving the road for a change where Medical Community Bank just wouldn't sound right. The board didn't tell members how much money it cost for the name change either.
How about the commercials after changing to First Basin Credit Union? They said something like, "Changing the color of banking." Doesn't add up. I thought we were a credit union.
Then, all of a sudden, the board decides that it's best for the members to convert to a bank. Did the board give us figures explaining in numbers why converting to bank would benefit us as members? Did it show how many dollars in business or home loans it has as a credit union as opposed to how many dollars in loans it would have available as a bank? Did they take time to call public meetings where members could come and ask questions and get solid, fact-based, honest answers? Did they explain in numbers how much more they could pay us in interest operating as a bank instead of a credit union? No, it didn't.
If they were truly doing something that would benefit members, they'd have the facts to back up their reasoning.
So then the board spends a ton of the members' money sending reams of letters saying that it can't grow as a credit union and could as a bank. But there was no business plan with current and speculative figures showing where we are now and where the projected change could take us.
It was just "vote for the conversion because the board is in favor of it." Now, to the best of my recollection, the board is in place to keep a watchful eye over the institution and be available to answer members' questions. Seems like if anything, board members were no where to be found. Members who tried to get board member contact information were told that wasn't available to them.
Now we get a notice in the mail stating that First Basin is having its annual meeting where "the nature and order of the business to be transacted will be as set forth in the bylaws." What does that mean? It means that the notice doesn't tell members that there are three seats on the board up for election by show of hands during this meeting. Why wouldn't the notice tell members about the election? Doesn't add up, unless, the directors whose seats are up for grabs don't want opposition members to attend where they could nominate someone to run against them and instill new leadership to watch over future board meetings for any funny business.
Perhaps maintaining a seat on this board would benefit current directors personally - like holding out for the possibility that within their next term the conversion will go through and set up the next step of going to a stock-issuing bank for a huge payout. Now, THAT adds up.
All this sneaking around, making decisions that affect members in secret, intentional omission of information, refusal to release the record of the conversion vote, creating a smoke screen by filing an intent for deposition to draw attention away from the matters-at-hand is ridiculous. This move is costing the members more money and is pathetic. It is intended to divert the energy of the opposition group toward mounting a defense instead of working to get the word out to First Basin members that an important election will be taking place and recruiting people to unseat current directors.
I could very easily move to a different credit union, but right is right and wrong is wrong. It adds up to it being the principle of the issue.
Members of First Basin Credit Union who are not satisfied with the performance of the current Board of Directors can attend the annual meeting at 7 p.m. today at the Odessa College Electronic Technology Building Room 130 and vote for someone who will be a better steward of the credit union.
Read it here on the Odessa American website
OA Poll: Members Want New Leadership! (4/15/08)
Added 5/12/2008 1:14:23 PM
First Basin fight
Comments 0 | Recommend 0
April 15, 2008 - 10:22PM
BY: ODESSA AMERICAN READERS
THE STORY: The day before the annual members' meeting for First Basin Credit Union, the continuing fight within the institution took another step - a petition was filed in Judge Stacy Trotter's 244th district court on behalf of Save First Basin members.
THE POLL: Should new people be elected to the board at First Basin?
>> Yes: 56 percent (5 votes).
>> No: 44 percent (4 votes).
OA Article on 4/15/08 Annual Meeting
Added 5/12/2008 1:09:32 PM
First Basin Board Stays:
Credit union meeting turns tense at times
April 15, 2008 - 11:52PM
By GEOFF FOLSOM
Nearly four hours after First Basin Credit Union's annual members meeting started Tuesday night, results of the board of directors vote were announced - as music to the ears of incumbents.
Around 500 people crowded into an Odessa College classroom for the credit union's first meeting since an attempt to convert to a savings bank, which ended last month.
And three incumbent candidates running for the board, First Basin Chief Executive Officer Shem Culpepper, board chairwoman Annette Snowden and Julian Beseril, Medical Center Hospital's executive director of finance, all came away with more than 300 of the 414 votes cast.
Mario Contreras, the highest finishing of five challengers, finished with 87 votes.
"I think it shows very clearly that this small radical group was able to manipulate a lot of people," Culpepper said after the vote was announced. "We very clearly displayed that we are a cohesive group and have more support than anyone in the community thought we would."
Culpepper used an hour before the official start of the meeting to show statistics he said shot down conversion opponents.
He was interupted several times by those calling for the other side to receive the right to respond, who were, in turn, called down by those wanting to hear Culpepper's remarks.
Culpepper then introduced Jack Selmon, an Austin attorney acting as parlimentarian. He was called on several times to explain rules.
Culpepper said Save First Basin was controlled by the North Carolina-based National Center for Member Trust, even pointing out similarities between Save First Basin's website and a website of a group opposed to a similar conversion in Utah.
Each candidate was given three minutes to address members. In his remarks, Culpepper said he knew most CEOs who tried to convert ended up being fired.
THE RESULTS:
The votes (top three are directors):
>> 327 Julian Beseril.
>> 327 Annette Snowden.
>> 325 Shem Culpepper.
>> 87 Mario Contreras.
>> 80 Danny Armstrong.
>> 42 Bob Thayer.
>> 30 Shan Johnson.
>> 24 Tom McKelvey.
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Reader Comments:
snanderbatch wrote:
Addendum to my previous comment:
More importantly, the Board of Governors, yes, the ones that got reelected, didn't want THE MEMBERSHIP of First Basin Credit Union to hear any opinions other than their own.
4/16/2008 9:10:35 PM
Recommend(1)
snanderbatch wrote:
The meeting did get a little tense at times. The effort put forth by the board of directors toward becoming a mutual savings bank, which had been abandoned March 4 due to what Culpepper called “manipulation” by a small radical group was not supposed to be the focus of the meeting. The focus of the meeting was supposed to have been election or reelection of members of the board who spent several hundreds of thousands of dollars of the membership’s money on an effort to fix something that not all agreed was broken. So, Culpepper spent the first hour explaining why the Save First Basin group was just plain wrong and by doing so he totally redirected the focus of the meeting.
But was this just a two-sided issue? Might there have been more information available that would explain and provide a clearer understanding of what it will mean when next year conversion will surely again become a focus and tons more money will be spent? Yes, such information was available. Though Tom McKelvey tried to present it, members of Culpepper’s forces shut him up right quick. Apparently, unbiased information is a real threat to the powers that be. Tom was neither for nor against conversion; he just wanted to add information totally unrelated to that disseminated by the Save First Basin group so the membership in attendance could make a more informed decision. The tragedy is that the folks who got reelected are unwilling to consider any viewpoint other than their own.
4/16/2008 8:50:46 PM
Read it in the ODessa American here
FBCU Members file legal claims against mangagment, for violating their legal duty to serve the members (4/14/08)
Added 5/12/2008 11:59:33 AM
First Basin Fight: Save First Basin group files return suit
Comments 3 | Recommend 5
April 14, 2008 - 11:28PM
BY GEOFF FOLSOM
The day before the annual members' meeting for First Basin Credit Union, the continuing fight within the institution took another step.
In March, Shem Culpepper, First Basin chief executive officer, filed a petition seeking depositions from three members of Save First Basin, an organization formed to oppose the credit union's proposed conversion to a mutual savings bank.
But Monday, a petition was filed in Judge Stacy Trotter's 244th district court on behalf of Save First Basin members Carol Uranga, Letty Ayala-Moreno and Sylvia Acosta seeking depositions from Culpepper and Annette Snowden, First Basin board chairwoman.
The petition, filed by Save First Basin attorney Cal Hendrick, said it seeks testimony about whether Culpepper and Snowden defamed the three Save First Basin members and breached fiduciary duty by spending hundreds of thousands of dollars on attorneys in preparation for the conversion vote.
Hendrick also filed an objection to attempts to depose Uranga, Moreno and Acosta.
"They're not doing it to investigate a claim," he said at a Monday news conference. "They're doing it to harass my clients."
Hendrick's petition said that among the statements in question are claims by Culpepper that Save First Basin members are "puppets" for the North Carolina-based National Center for Member Trust and that its leaders were engaged in a "scaremongering stew of lies."
"At best the statements are derogatory," the petition said, "and, at worst, they are actionable."
Hendrick said it's no coincidence both sides are filing action so close to the annual meeting.
"If we're gonna be investigating, let's investigate everybody," he said.
Efforts to reach Culpepper were not successful Monday evening.
Meanwhile, Moreno said Monday that Save First Basin plans to nominate three members for director positions at tonight's meetings: Danny Armstrong, Mario Contreras and Tom McKelvey.
"They will represent the members on what they want and not what will be beneficial to them," she said.
Save First Basin has been seeking a turnover in the board since the credit union withdrew its proposed conversion to a savings bank last month. Culpepper blamed the end of the conversion attempt on "misinformation" from opposition, while Save First Basin claimed it was because the credit union didn't like the way member voting was going on the issue.
While Culpepper has said First Basin has doubled its value in the last four years, Armstrong said it did well in the Permian Basin long before Culpepper took the reigns.
"It has been successful for decades," he said. "I think it needs to remain that."
First Basin annual members meeting
>> When: 7 p.m. tonight.
>> Where: Odessa College Electronic Technology Building, Room 130.
>> What will happen: Three of seven positions on First Basin's board of directors are up for vote.
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Reader Comments:
cbtexas wrote:
Yes it used to be called Medical Community Credit Union. They first catered to the medical community before they expanded and changed names.
4/15/2008 8:15:56 PM
Recommend(0)
papercut wrote:
Oddly, I didn't know First Basin had been around for "decades", was it called something else before?
4/15/2008 5:16:45 AM
Recommend(1)
oldodessan wrote:
Here's a great example of people defending their own rights. A credit union is formed for the particular benefit of a group of people, rather than trying to be all things to all people.
First Basin has been very successful for many years in meeting the needs of its members. When institutions take on new roles and different roles, disaster often follows. Bear Stearns was one of the world's largest investment banks before they became involved in hedge funds and subprime mortgages. Today, thanks to their own financial shenanigans, they do not exist.
Anything wrong with meeting the needs of your own members for decades and staying a strong and reliable institution for those members? No.
Good luck to the 3 trying to do the right thing in the board election, and bless them. If more folks would take direct action, many of the messes of today's world would not exist.
Read it here on the Odessa American website
FBCU Officially Cancells Bank Conversion (3/6/08 article)
Added 5/12/2008 11:46:53 AM
No change at First Basin
March 6, 2008 - 5:41PM
BY GEOFF FOLSOM
Less than three weeks after suspending a conversion vote, First Basin Credit Union has officially pulled the plug on attempts to become a savings bank.
“We’ll be marginally successful,” First Basin Chief Executive Officer Shem Culpepper said of his credit un-ion’s future. “We will not be able to succeed in the manner that we should.”
Culpepper blamed “misinformation” from Save First Basin, an anti-conversion group for the demise of the change.
In the wake of the announcement, Save First Basin is now calling for a turnover in the credit union’s board.
Save First Basin co-founder Letty Moreno said her group would have a committee meeting next week to determine who is qualified to run for board positions. She knows five people interested in running, but said she doesn’t want to herself.
“We feel that they are not representing the members’ best interest,” she said of the present board. “We want to get some people that are going to think about the benefit of the many, and not the benefit of a few people.”
But Culpepper said First Basin has undergone unprecedented growth under current leadership. It has increased its net worth by $5.6 billion over the past four years, doubling its value.
Culpepper said regulations prevented him from giving figures like that while the credit union was seeking to become a bank, but, now, he looks forward to sharing such statistics.
“I’m not sure why anybody would be interested in replacing a board that has had such extraordinary success, unless there is an agenda in place,” he said.
That agenda involves bitter former employees, Culpepper said.
Moreno, a former vice president at First Basin, said he’s referring to her. But she disputes the idea that she is out for revenge.
“I think that’s the only thing at this point that Mr. Culpepper can use,” she said. “He cannot dispute our facts, so the only thing he can do is attack me personally.”
Moreno said she left First Basin on her own accord after disagreements with Culpepper’s management style.
“I did not go out and decide I’m going to do this to mess his world up,” she said. “Others contacted me who were in positions where they could not come out and speak.”
Moreno said she would like to see a new board because she fears more attempts to try to become a bank.
Culpepper said that isn’t in the works.
“We have no intention at this time to do anything other than to carry on business as a credit union,” he said.
For now, First Basin will have to continue with limited amounts of business loans it can hand out and limited expansion possibilities, Culpepper said.
Culpepper also disputes a claim by Moreno in a news release that board members could receive “hundreds of thousands of dollars of insider enrichment, at the members expense” had First Basin converted to a bank.
First, in order for board members to receive payments, a second conversion, to a stock-issuing bank would have been required, he said. And, even then, outside investors would provide the capital, not customers.
While Save First Basin members say a board meeting is required to take place this month, Culpepper said he hasn’t had time to set a date.
“This (conversion) takes me hours every day to deal with,” he said.
While Culpepper sees rough waters ahead, Moreno, a First Basin member, is basking in the decision not to convert.
“We’re thrilled,” she said. “We’re looking for ways to make the credit union better for its members.”
Read it here on the Odessa American website
First Basin Elections on Tuesday, April 15th
Added 4/18/2008 2:12:11 PM
Don’t approve of the current leadership? Now is your chance. At the annual meeting, member have the once a year opportunity to elect new leadership.
The annual meeting will be held on:
April 15, 2008 at 7:00 PM
Odessa College Technology Building, RM 130
We strongly encourage all members to attend. To elect new leadership, we will need your vote. If you need any help attending, email savefirstbasin@gmail.com.
Here is why we feel First Basin Credit Union needs new leadership.
OA Letter about Tuesday's election,
Added 4/11/2008 8:49:57 AM
First Basin member Danny Armstrong's letter to the editor was published in the OA today! Read it below.
A Time for Action
April 10, 2008 - 9:38PM
Danny Armstrong
Members of First Basin Credit Union need to ask themselves this question: "How much of your money will you allow the elected board of directors to waste?"
At the annual meeting Tuesday, we have the opportunity to elect new leadership for our credit union. Many members, including myself, are troubled that our elected leaders have spent over half a million dollars of member-owned funds proposing that we convert to a bank - a move without clear benefit to us, but which could create the opportunity for hundreds of thousands of dollars in insider gain.
I am troubled that our credit union leadership has not even informed members that an election will take place. Instead, they sent a postcard with the phrase: "The nature and order of the business to be transacted will be as set forth in the bylaws." Why did the elected leaders not tell us an election is taking place? Why did they choose not send us all mail ballots?
Why have they refused to even tell members which directors are up for re-election?
I think its time to elect new leadership.
First Basin Credit Union is in fact a strong, wholesome, good and viable institution even under the current leadership and management. It seems to be remarkably resilient.
It is one of the three largest in the entire Permian Basin and has held this position for more than a decade.
It has prospered from our local economy and money on deposit from faithful members. Our credit union has more than $125 million in net worth!
Those are members' dollars, not the just for the Board of Directors. Members also are an owner in this credit union. That is why they have the power to vote.
Another question worth asking: "What motivated the board at FBCU to attempt a rare conversion from a nontaxed, nonprofit credit union to a taxable and ‘for profit' institution?"
Members also may have heard from Save First Basin. (SaveFirstBasin.com is a good source of information for those who have not had a chance for independent study.) It is time for members to decide if they want to allow this board to continue as stewards of their money.
Will they make another stab at their conversion attempt once they have finished beating up on Letty Moreno because she was vocal in her opposition to their defeated proposal?
If members want their money managed responsibly, I encourage them to come to the annual meeting and vote. The meeting will be held at 7 p.m. Tuesday at the Odessa College Technology Building, Room 130.
Danny Armstrong
Read "A Time for Action" on the OA website
Basin Withdraws Conversion Proposal--Time for New Leadership!
Added 4/4/2008 6:36:45 PM
On Wednesday March 5th, First Basin Credit Union withdrew its proposal to become a bank. We are glad that First Basin management has recognized that what they were doing was wrong, and that the members did not support it.
This is a victory, but the story does not end here: At the annual meeting this month, we have the opportunity to vote in new directors who will work for the members' interests, not their own. We encourage members to come out and vote for honest, responsive leadership.
Join Save First Basin, and we'll keep you updated about the annual meeting!
First Basin CEO and Board threaten to sue members!
Added 3/17/2008 8:04:19 AM
From CUNA News Now: First Basin members' group 'disappointed' in lawsuit plans
ODESSA, Texas (3/13/08)--Members of a group that opposed the now-withdrawn attempt by First Basin CU to convert to a mutual savings bank expressed disappointment in learning the credit union may sue the group's founders.
Members of the opposition group, Save First Basin, say the management of the Odessa, Texas-based credit union announced Tuesday it would sue three members, including Letty Moreno, a co-founder of the group. Moreno is a former vice president at the $114 million credit union.
The group has "done nothing wrong. We have simply stood up for what is right and told the truth," said Moreno in a press release from the group.
The group had been vocal in pressing for details about the election results on the proposed conversion. The credit union cancelled a scheduled membership vote on the proposal earlier this year. And on March 4 CEO Shem Culpepper announced the credit union was withdrawing the conversion proposal.
Now Save First Basin is planning to field a slate of candidates in the next board election.
Danny Armstrong, a member of the credit union for 17 years, said he was "disappointed" in hearing the news of a potential lawsuit. "They have spent at least half a million dollars of [the credit union's money] for something that would benefit themselves, not the members."
Anna Vera, a member for 10 years, said the credit union "should not be attacking members because their bank plan was rejected."
###
Odessa American Article below:
Read the OA 3-13-08 article : "Deposits to depositions". Read the comments at the bottom!
First Basin CU Withdraws Conversion Proposal! Time for new leadership!
Added 3/5/2008 3:59:04 PM
This morning, First Basin Credit Union withdrew its controversial proposal to become a bank.
We are glad that First Basin management has recognized that what they were doing was wrong, and that the members did not support it.
This is a victory, but the story does not end here: At the annual meeting this month, members can vote in new directors who will work for the members' interests, not their own. We encourage members to come out and vote for honest, responsive leadership.
Despite multiple requests from members, First Basin’s CEO and directors have not yet announced the time or location of the annual meeting, which is required by the credit union’s bylaws to take place this month.
Here is why we want new leadership: Our directors are elected leaders who’s job is to serve the members, but…
-These directors have abused their positions by proposing to turn our credit union into bank, which could have created opportunity for insider enrichment, at the members’ expense.
-They have mismanaged our money by spending it to hire Washington DC lawyers and Huston telemarketers to tell us how to vote.
-They violated the democratic principles of our credit union by canceling the election, presumably because they did not like how the members were voting.
-They have violated the members' trust by distributing misleading information in support of their proposal, and by refusing to release the results of the vote or how much money they spent.
We deserve better. We encourage all members to attend the annual meeting, and vote for new directors that will work for members' interests, not their own.
Letter to the OA: "A Case of Self-Interest?"
Added 2/29/2008 10:59:45 AM
In this excellent letter to the editor, Eddie Spence writes:
"They say it is for the good of the credit union and members. My mommy always told me that when someone is falling all over him or herself and telling you they are trying to help you, they are really probably trying to help themselves."
Read "A Case of Self Interest" from the Odessa American, 2-26-08
OA letter by Letty: The People Have Spoken
Added 2/25/2008 9:57:20 AM
"The members have already spoken, and we want to keep our credit union. Culpepper and board have already spent enough of our time and money on this.
If they are not interested in listening to the will of the members, they should step down or the members will find new leadership that does represent them."
"People Have Spoken" by Letter Moreno, Odessa American, 2-24-08
Save First Basin on Feb 15th TV News!
Added 2/21/2008 1:12:17 PM
NewsWest 9: A group of union members called "Save First Basin" believe becoming a bank will cost members more money and take away their say in how the organization is run.
"Save First Basin" has mounted a campaign to stop the conversion.
Armado Rodriguez challenges FBCU Board to represent the members or step down!
Added 2/20/2008 8:08:26 AM
In his letter to the editor in the Feb. 19th Odessa American, Armando Rodriguez writes: "After all that time and money spent, now they are pulling the plug just days before the results of the election are released?
That is mismanagement, and it smells fishy.
If the CEO and the Board of Directors are not willing to represent the members, they should step down.
"Answers Please" by Armando Rodriguez
Credit Union Journal: Disgruntled Members Seek Board Ouster at Failed CU Convert
Added 2/19/2008 8:39:34 PM
Today the Credit Union Journal ran an article about Save First Basin. The text is below.
Disgruntled Members Seek Board Ouster at Failed CU Convert
ODESSA, Texas – Members fighting the conversion of First Basin CU to mutual savings bank say they will seek the recall of the directors of the $110 million credit union after they terminated their efforts to switch to a bank charter.
"We feel the credit union board does not represent the best interests of the credit union," said Letty Moreno, a former credit union employee and head of Save First Basin, an ad hoc group of members opposing the bank-bid.
Moreno said members felt the suspension of the conversion ballot just days before the 90-day vote was scheduled to culminate in a special meeting was suspicious. "We speculate they (the board) were probably losing," she told The Credit Union Journal yesterday.
The members group is calling on credit union management to make the voting results public.
The recall of the board after a failed conversion to savings bank has been tried three times in recent years, all unsuccessfully.
In a letter to members last Friday, First Basin President Shem Culpepper said they decided to suspend the vote because they believe members were receiving false information indicating they would lose their deposits if the vote was successful. In lieu of the conversion, First Basin will now explore whether they can legally return some of the credit union's equity to members as a special dividend, Culpepper told the members.
Credit union officials were unavailable to comment yesterday.
The suspension of the First Basin vote comes as the results of another member ballot to convert to mutual savings bank, Beehive CU, in Salt Lake City, is expected to be announced later this week.
© 2008 Credit Union Journal and SourceMedia, Inc. All Rights Reserved.
Members demand election results be released!
Added 2/19/2008 11:33:48 AM
From the Feb. 16th Odessa American article:
“This is not the Soviet Union,” credit union member Sylvia Acosta said. “They cannot simply shut down the election if they are not getting the results they want.”
Odessa American: "Group happy with delay: redit Union members say they ‘won’" 2-16-08
First Basin Suspends Conversion Vote!!
Added 2/16/2008 12:22:04 PM
From the Feb. 15th Odessa American article:
The vote suspension is a victory for Save First Basin, group co-founder Letty Moreno said, but the group’s members want the results to be revealed because they feel it will show the lack of conversion support.
“It’s a way for them to save face because they weren’t winning,” Moreno said.
Odessa American: "Vote suspended" 2-15-08
Press Conference Sat. Feb. 16, 2008 at 10:00 a.m. WCR
Added 2/16/2008 6:16:03 AM
Press Conference will be held by the members of Save First Basin. Speakers will be Father Mark from St. Joseph's and St. Mary's Catholic Churches, Armando Rodriguez, Carol Uranga, and Letty Moreno.
Come Join Us!!
Odessa American: "Credit Union Fight Heats Up"
Added 2/11/2008 10:16:28 PM
Insurance agent Tara Simmons likes being part of a credit union and said she used to recruit new members for First Basin, telling them the virtues of a credit union over a bank. "Everything they did to encourage new members is the opposite of what they’re doing now,” she said.
Odessa American: "Credit union fight heats up" 1-29-08
Odessa American runs letter to the editor questioning First Basin's tactics
Added 2/11/2008 10:13:24 PM
I want to express my disappointment. I expect more from the elected and appointed leaders of my credit union. There is no need for deception and intimidation.
If they had the facts on their side, why would they need to resort to those tactics?
-Letty Moreno
Odessa American: "Get the facts about credit unions" 2-10-08
Save First Basin on TV News!
Added 1/31/2008 9:42:29 AM
Watch KWES NewWest 9's coverage of our Jan 29th action at First Basin. We were out there giving members the facts about this conversion!
-First Basin can already open new branches, make more home loans, and make more business loans without converting.
-Converting will probably force First Basin to charge us worse rates, just as the other credit unions that have converted to banks have been forced to do. Why? Because becoming a bank means paying bank taxes--34.5% of the credit union's income. Higher costs for the credit union mean worse rates for us.
Watch Save First Basin on TV!
Added 1/30/2008 9:34:04 PM
KWES NewsWest 9 and other stations covered our January 29th action at First Basin. Also in this clip, Ray Boss, CEO of Midland Community Credit Union explains some of the reasons converting to bank is not a good idea. Watch us on TV by clicking the link below. (The link below will open the written story, and include a link to open the TV clip in Windows Media Player.)
Read the article and watch the news
Press Conference
Added 1/29/2008 7:39:45 PM
Today Save First Basin held a press conference outside of the credit union's headquarters, urging members to oppose the conversion. The OA Online ran a story about the proposed conversion. Click below to read the article.
Read about the press conference
Save First Basin talks to the press
Added 1/28/2008 8:03:03 PM
Save First Basin members will be out talking to the press on Tuesday Jan 18th at 10am, at the First Basin branch at 2740 N. County Rd. West, Odessa. Speeches will be made by Armando S. Rodriguez and LULAC Council 4451 President Carol Uranga. Hope to see you there!
The Credit Union Difference
Added 1/28/2008 9:43:10 AM
Do you still have questions about the differences between banks and credit unions? The website linked to below offers a quick, simple video that explains the primary differences.
The video was first created by Larissa, spokesperson for Commonwealth CU’s Young & Free campaign.
CU Times: First Member-To-Member Letters Inaugurate New Era In CU-Bank Conversion Fight
Added 1/24/2008 9:01:34 PM
On January 23 the Credit Union Times ran an article about the efforts members of First Basin are expending to fight the proposed conversion. The article also details the struggles of members of Beehive Credit union in their effort to stop a similar conversion.
Click on the read link below to visit the article.
Ballots are Here!!
Added 1/24/2008 2:12:44 PM
You should have received your ballots in the mail today! Please remember to VOTE AGAINST THE CONVERSION and mail them back!!!
SAVE First Basin launches radio spot to make our voice heard!
Added 1/17/2008 8:27:14 PM
On Jan 16th, Letty Moreno recorded a radio piece with the Spanish language station Q108. We hope that this will help inform other members about the worse rates and fees, loss of member ownership, and other problems of converting to a bank. The radio piece will run regularly through February.
Listen yourself here!
Don’t forget to vote! First Basin Credit Union will mail you a ballot in late January.
Added 12/28/2007 11:08:01 PM
You can vote by mail, or in person at the special meeting on Thursday, February 21, 2008 at 7:00 p.m. The meeting will be held at:
Caribbean Room
MCM Elegante Hotel
5200 East University
Odessa
Odessa American article on the proposed conversion and reader comments
Added 12/28/2007 10:51:59 PM
click on the link below to read an article printed in the Odessa American on October 23, 2007. Be sure to take a look at the reader comments!
Read the Odessa American Article and Reader Comments
Armando Rodriguez supports Save First Basin!
Added 1/28/2008 8:00:04 PM
An owner's view
by Armando S. Rodriguez
Why does the leadership of First Basin Credit Union, a member-owned nonprofit want to convert our credit union into a bank?
I'm a member and owner of First Basin. If you are First Basin customer, so are you. So when I received First Basin's letter explaining the conversion and the upcoming member election to vote on it, I was concerned.
We member-owners have a lot to lose. First Basin now offers some of the best savings and loan rates in West Texas.
But a study by the University of Wisconsin shows that credit unions that convert to banks offer worse rates for every sort of savings and loan studied.
Why? Because when a credit union converts, it loses tax-free status and must pay 34.5 percent of its income to the government.
If the new bank sells stock, the board's legal duty changes from serving members to maximizing profits for shareholders. Where will the money to pay taxes and profits come from?
It will come from the membership, in the form of worse rates and higher fees.
First Basin members could also see our ownership sold away without receiving any sort of compensation. That's what happened at Community Credit Union in Dallas.
After converting to bank, the board and senior executives personally made more than $26 million by selling their members' institution. More than 98 percent of the members did not receive a dime in return.
So why convert?
In the letter to members, the board says that if First Basin converts to bank, it can open new branches. But First Basin currently has six branches and could already open many more without converting.
The letter said that as a bank, First Basin could make more real estate loans. But credit unions have no cap on real estate lending.
The letter said that as a bank, First Basin could make more business loans. But First Basin could expand its business loan program five times over and still be below its business lending limit.
Further, conversion to a bank would only raise that limit enough to make about 59 more business loans of average size, which would serve just 0.24 percent of the members.
So, what's the real reason for trying to convert, First Basin?
As members, we own our credit union, and the decision is up to us. Members can tell family and friends to vote AGAINST the board's conversion proposal. Let's keep our good rates and member ownership.
For more information, visit our website www.savefirstbasin.com or e-mail us at savefirstbasin@gmail.com.
