Conference 7.286::dcu

    It is encouraging that the B.S. level seems to have dropped a bit in
    this 'communication'.
    
    Bob

    Yeah.  The only thing they didn't say was that the special meeting
    voted explicitly to put all BoD positions up for re-election.

    And they stated, "... in an attempt to continue open communications
    with our membership, we would like to address ...".
    
    Based on what I have seen since, say, last August, there has never been
    *ANY* attempt to have "open communication"; just self-serving
    communication to make the BOD look good, even at the expense of
    distributing inaccurate information.
    
    This letter does appear to be an improvement, though ...
    
    	-- Jeff

Note their interpretation of item #1.  My understanding was that the
recission we vote on was to *permanently* do away with monthly fees on
basic checking.  The letter from the BoD paints the issue as the
membership concurring with what the board had already done.  The letter
goes on to say that the changes are rescinded until Chuck Cockburn 
completes a strategic plan.  We should keep a close watch on DCU's
fee structure and insure that they don't go against the vote of the
membership and re-impose fees on basic checking in the future.

I am cautiously optimistic about the opening of all 7 board positions
for election.  Now we'll see if they're willing to qualifty candidates
who apply, and if they're willing to let candidates have more than
100 words to say who they are and what they're thinking.

It is important now to work hard to get the vote out for the election.
People need to be encouraged to vote, regardless of who they vote for.
We need to keep the issues in front of people regarding the past
behavior of the current BoD, and make sure people know who's who.

"continue open communications..."  - sheesh, what a joke!

Looks like they're starting to hear us, though......

./chris

	Maybe they are starting to hear us, because this letter does
	seem to be an improvement. However:

>With the intent to act in the spirit of the Special Election,
>the Board has decided that all seven (7) board positions will be open.

	Ahem. We, the members, decided that at the Special Meeting.
	To imply that the BoD had to somehow concur reeks of the
	arrogance that most members are complaining about.

					Tom_K

�Note their interpretation of item #1.  My understanding was that the
�recission we vote on was to *permanently* do away with monthly fees on
�basic checking.  
    
    I don't believe there was any wording to that effect in the question on
    the ballot.

    
    RE: fees
    
    Yes, the BoD effort to pre-emptively strike agenda item #1 appears to
    be continuing.  They now appear to be linking it to Cockburn's
    "strategic plan" and anybody who has heard Cockburn speak at any of his
    site visits (gee, any scheduled after the special meeting;-) knows that
    he wants fees.  His objective is to get more equity.  Fees goes a lot
    way towards that.  This is where, hopefully, a BoD with people more in
    touch with the general membership can play a major role.  The
    membership overwhelming showed at the Special Meeting that we did NOT
    want to go that route.  Now if the current BoD is so kind as to follow
    tha intent of item 3, then they should also honor the wishes of the
    membership on item 1.  It is more critical than ever that we get people
    on the Board who aren't afraid to reel in a DCU President when
    necessary.  It wasn't done by the current Board in the past and we have
    seen the high price.  If the BoD and/or Mr. Cockburn did not hear the 
    membership at the Special Meeting then we will have another one.  I would 
    also like to add that the right of removal extends to DCU management.
    
    
    RE: "open communication"
    
    The BoD must realize that we wish "open communication" on issues we ask
    about, not just the ones they feel they want to comment on.  "Open"
    communication which dodges the real questions isn't communication at
    all.  It is more commonly known as stonewalling.  Any "open
    communication" must first be backed up with the removal of the BoD-PP. 
    Saying you are "openly" communicating while this policy is in place is
    a joke.  But how many DCU members even known about this policy?  Do you
    think you'll see it written up in the next Network brochure?  If it
    was, more DCU members would ask themselves why such a policy was
    necessary.  And the last thing DCU wants is more members asking
    questions.
    
    
    RE: elections
    
    Besides getting the vote out, we also must find out why about 17% of
    the votes were rejected in one election.  Only votes that are cast AND
    COUNTED mean anything.  This is definitely something that DCU should be
    covering in their communications.  I don't know why we haven't heard
    about this sooner.  That's a pretty dang high rejection rate IMO.
    

    I hope we don't resort to calling a special meeting every time someone
    has a disagreement with the BoD.  There is no such thing as a free
    lunch, and free checking is fast approaching that status.  We elect the
    BoD and they hire a president to make business decisions.  Let's let
    them do their jobs.
    
    Hasn't the Communications Policy already been communicated in a few
    places?
    
�    Besides getting the vote out, we also must find out why about 17% of
�    the votes were rejected in one election.  
    
    Hasn't this already been answered in another topic?  According to info
    from the DCU, the vast majority of votes rejected in a recent election
    were due to improper signatures.   Some were rejected due to too many
    candidates being selected on the ballot.

>    I hope we don't resort to calling a special meeting every time someone
>    has a disagreement with the BoD.  There is no such thing as a free
>    lunch, and free checking is fast approaching that status.  We elect the
>    BoD and they hire a president to make business decisions.  Let's let
>    them do their jobs.
    
    But we ARE paying for "free" checking.  We already must keep a high
    minimum balance in the account.  DCU is ALREADY making and keeping $3-4
    million a year.  We receive NO dividends.  What the membership does NOT
    want is FEE checking.  Imposing fees just because everybody else is
    doing it is NOT a valid reason.  DCU's membership is a yet untapped
    source of loan revenue.  We do not need new checking account fees
    period.
    
    As for letting them do their jobs, I agree 110%.  The BoD's job is to
    represent the membership.  If the membership overwhelming states their
    desires and the BoD chooses to ignore them, them they can and should be
    removed.  If Mr. Cockburn feels he wants to increase the credit unions
    equity over a short period of time, and can't live with a slower equity
    buildup (with no fees) then he should probably find someplace else to
    institute checking fees.
    
    
>    Hasn't the Communications Policy already been communicated in a few
>    places?
    
    Where?
    
>�    Besides getting the vote out, we also must find out why about 17% of
>�    the votes were rejected in one election.  
>    
>    Hasn't this already been answered in another topic?  According to info
>    from the DCU, the vast majority of votes rejected in a recent election
>    were due to improper signatures.   Some were rejected due to too many
>    candidates being selected on the ballot.

    No it has not been answered.  People in here have only wondered at why
    they were rejected.  Only the Auditors and DCU know for sure and I am
    not aware of a statement by either of them cocnerning this issue.
    

Regarding "open communications", did anyone else notice what the 
letter didn't say?  The members "voted overwhelmingly" to rescind 
the checking fees, the members voted 650 - 540 (i forgot the 
exact count, but it was in the letter) to keep the Board.  And, oh 
yeah, new elections will be held.  While this is factually 
correct, I wonder why they didn't include a comment about the 
size of the vote, like they did on the other two issues.  I guess 
they didn't want to admit that the members voted overwhelmingly
to hold new elections.  Things like this make me wary of comments 
about "open communications".

>    But we ARE paying for "free" checking.  We already must keep a high
>    minimum balance in the account.

Huh?  There's no limit on the balance.  We only get paid interest for those
days when the balance is $1000 or more, but I've never heard of a checking
account that paid interest regardless of the balance.  Many checking accounts
have a lower balance at which they pay interest, but many require you to
maintain the balance all month or all quarter in order to get interest.

    �Imposing fees just because everybody else is doing it is NOT a valid
    �reason.  
    
    I never said it was.  However, if everyone else is doing it there is
    probably some sound reasoning behind it.  From Chuck Cockburn's
    statements it does appear that business reasons will determine the fee
    structure.
    
�We receive NO dividends.  
    
    I've been a member of 3 credit unions over the past 10 years.  I don't
    recall receiving dividends from any of them.
    
    �DCU's membership is a yet untapped source of loan revenue.  
    
    In this economy, I wouldn't count on this source very much.  Borrowing
    is down all over, not just within the DCU.
    
    �If the membership overwhelming states their desires and the BoD chooses
    �to ignore them, them they can and should be removed.  
    
    You could probably get the membership to vote for interest free car
    loans.  The BoD would probably ignore this.  Should they be removed?
    
�>    Hasn't the Communications Policy already been communicated in a few
�>    places?
�   
�    Where?
    
    I believe there has been at least one mailing to the members on this.
    
�    No it has not been answered.  People in here have only wondered at why
�    they were rejected.  Only the Auditors and DCU know for sure and I am
�    not aware of a statement by either of them cocnerning this issue.
    
    Someone in here posted a letter from Mary Madden addressing questions
    around an election where there was confusion in the directions. 
    Although only 2 positions were available, the directions said to vote
    for no more than 3 candiates.  The response gave the total number of
    votes for each candidate, the number of invalid votes, and grouped the
    invalid votes according to reason for invalidation.  It was posted
    after the Special Meeting.  I suggest you look in one of the last few
    topics in the conference.

�    Someone in here posted a letter from Mary Madden addressing questions
�    around an election where there was confusion in the directions. 
    
    I checked.  The response from the DCU regarding the 1988 election
    results is in topic 401.

    RE: .11
    
>Huh?  There's no limit on the balance.  We only get paid interest for those
>days when the balance is $1000 or more, but I've never heard of a checking
>account that paid interest regardless of the balance.  Many checking accounts
>have a lower balance at which they pay interest, but many require you to
>maintain the balance all month or all quarter in order to get interest.
    
    That's what I mean't.  But I have seen places that paid a sliding scale
    of interest depending on what your balance was.  The no interest
    threshold was much lower than what DCU's is.
    
    
    RE: .12
    
>    I never said it was.  However, if everyone else is doing it there is
>    probably some sound reasoning behind it.  From Chuck Cockburn's
>    statements it does appear that business reasons will determine the fee
>    structure.
    
    Huh?  Because somebody else is doing it is a reason we need to do it? 
    I don't buy this for a minute.  I think DCU is doing because everybody
    else is doing it and they see it as another source of income whether
    they need it or not.  Is "we want more money from you" a valid "business 
    reason"?
        
>    I've been a member of 3 credit unions over the past 10 years.  I don't
>    recall receiving dividends from any of them.
    
    It's not unheard of.  May these other credit unions have also fallen
    prey to a bankers mentality.
    
>    In this economy, I wouldn't count on this source very much.  Borrowing
>    is down all over, not just within the DCU.
    
    People are still borrowing money.  They are just more discerning about
    where they borrow it from.  If a place is uncompetitive on their rates,
    you better believe nobody will be pounding their door down.  Cockburn
    has stated that the loan "products" are at 70% efficiency, as is. 
    Clean up the rest of the operation before instituting fees.
    
>    You could probably get the membership to vote for interest free car
>    loans.  The BoD would probably ignore this.  Should they be removed?
    
    Let's keep this discussion on realistic scenarios please.
    
>    I believe there has been at least one mailing to the members on this.
    
    None that I have.  And I do keep them all.  Sometimes they prove very
    handy...
    
    
>    Someone in here posted a letter from Mary Madden addressing questions
>    around an election where there was confusion in the directions. 
>    Although only 2 positions were available, the directions said to vote
>    for no more than 3 candiates.  The response gave the total number of
>    votes for each candidate, the number of invalid votes, and grouped the
>    invalid votes according to reason for invalidation.  It was posted
>    after the Special Meeting.  I suggest you look in one of the last few
>    topics in the conference.
    
    I've seen the totals but they say nothing as for the exact reason for
    rejection.  This is a real issue with me because DCU also rejected
    about 15% of the first 230 special meeting petitions that were submitted.
    I personally examined every one to make sure it was signed.  People
    signed and also printed their name.  I want to know if signatures have
    to match what is on file at DCU EXACTLY.  Obviously a blank signature
    would invalidate the ballot.  I believe the instructions already say
    this.

Note 401.0 does indeed give the reasons the auditors cited for so many
votes being invalid -- mostly because "No Validation Certificate of 
Signature".  But no one has said what that means. 

There was some speculation that maybe they checked ballot signatures
against the signature cards that the DCU has on file.  If so, this is a
PROBLEM and the DCU needs to do something about it -- are you *sure* you
know whether you included your middle initial on your signature card?  Are
you prepared to be disenfranchised if your memory is wrong?  Or if somebody
decides that the handwriting doesn't match?  I'm not.

It's also possible that this is something fairly trivial, like if the 
instructions say you have to sign the same way your name appears on the
mailing label and lots of people didn't.  But even in this case, it's still 
a problem -- a properly helpful DCU would recognize that it needs to make
the instructions clearer.  If a few bozos screw up, it's their fault, but
if 17.5% of the respondents screw up, the instructions need to be improved.

Or maybe there's some other reason.  But regardless, the reason why there
was such a high rate of signature rejections hasn't been explained that
I know about, and it represents a problem that ought to be fixed in the
coming election.

	Enjoy,
	Larry

    re: .12
    
    I'm confused by what is meant by a Communications Policy that was
    mailed to memebers.  If you're talking about the standard "call Mary
    for more info", then I agree since DCU communications have often
    included something like this.  If you are talking about the Information
    Protection Policy, this has certainly NOT been mailed to members.  In
    order to get a copy from DCU, members have to request it in writing and
    state a business reason for getting a copy of the Information
    Protection Policy.  You can't stop in at DCU HQ and just pick one up,
    even if you drop off a written request.  Mary has told me this when I
    attempted to do just that.  It is the only time I have communicated
    with Mary directly by phone.
    
    Once you have done that, you will be mailed a letter wherein you are 
    informed as to whether or not your request is approved and how much it 
    will cost you to get it.  You then send another letter with a check for
    the amount required to get the documentation (in this case, probably
    $.25 unless someone needs to take time to look it up, in which case it
    costs significantly more).  This procedure is documented in the 
    Information Protection Policy, which can make it kind of hard to find out 
    about it unless you already know what it is.  It's one more barrier to 
    information from the DCU.  So, much for "open communications", well my
    figuring of what it's supposed to be anyway.  
    
    At least the PROCEDURES for getting "open communication" with our DCU 
    should be made widely available by the DCU.  They don't have to send it to 
    all members.  Just keep one copy available for inspection at all branches.  
    Why hasn't this been done if they are truly interested in "open 
    communications"?  I think it is because they are using "open communications"
    as a euphemism.  It is a term that sounds nice and to which they are 
    applying their own definition which has not yet been generally disclosed.
    
    As to the mailing, it is at least consistent.  As near as the casual
    observer can tell, having elections for all seats on the Board was
    their idea.  And, rescinding the fees was their idea too, once Chuck
    convinced them of it.
    
    Steve

    Regarding checking fees and interest on checking.

    When I followed Mary Madden's advice to shop around, I found that some
    banks indeed offer free checking and pay interest on balances at a
    better rate. To quote the bank I chose:

	FREE-INTEREST CHECKING ACCOUNT- It's free! We'll pay you
	interest on all money in the account.  You don't hve to
	pay any fees or meet a minimum balance requirement.

    Why can a commercial institution offer free checking and a nonprofit
    credit union not (tho there are many examples of them doing so).
    Commercial banks make profits and pay these in the form of dividends to
    the stockholders.  Credit unions either reinvest these profits in
    providing better service, lower fees or pay them as additional
    dividends to the members. Lower fees can be nofee checking it all
    depends on the goals of the management and the BOD which should be
    directing the credit union for the membership.  In the DCU case, they
    seem to be following their own agenda

    Regards,
    Bob
    

    
    The $100,000 question is:
    
    Why does a credit union that is making $4.4 million in profit 
    (1990, excluding participation loan losses) need to increase their net 
    income by charging fees on checking?
    
    Possible answers:
    
    1. Everybody else is doing it. (debatable)
    2. Need to increase capital to asset ratio. (it will increase w/o fees)
    3. Eliminate "deadbeat" members. (need to eliminate "banker" mentality
    				      instead)
    4. Inactive accounts (they have already taken care of these, TWICE)
    5. DCU President evaluated on increasing net income. (hmmm. change metrics)

    
    Re: 0
    
    I don't think that this letter shows any improvement at all.
    
    Unless I'm missing something, they never directly stated that there
    had been a vote on the third agenda item let alone report that it
    passed overwhelmingly.  Then they made the statement about the BOD
    "deciding" that all board positions would be open in keeping with
    the intent of the meeting.  In other words, they imply that the third
    agenda item was not directly addressed but that in their wisdom and
    magnanimity that they took it upon themselves to hold the elections
    for all BoD positions.
    
    IMO, the overwhelming vote on the third agenda item, which they
    cleverly avoided reporting, DIRECTED them to do that.  So where is
    the new sensivity others are seeing?  It seems to me to be just more
    of the same old arrogance, but perhaps more carefully disguised.
    
    Steve
    
    
    

    re .19
    
    How about this interpretation ...
    
    Looks like they are saying that the vote on the third item was indeed
    moot given that the second item failed based on the idea that the
    third item was only necessary if the second item passed.  Given that
    even the petitioners, let alone the BoD, didn't anticipate the meeting's
    interpretation of the items, certainly poses a legalistic debate.  So
    the easiest way around this is, indeed, to obey the spirit of the
    meeting decisions, rather than the letter, and that is exactly what
    they said.
    
    Whether this is meant to be manipulative by what it does and doesn't say 
    is questionable.  To be honest it looks like it is just reporting what
    happened from their perspective and what they are doing about it.  One
    can hardly expect the BoD to have someone here proof it before
    publishing.  Given the meeting reports I've seen, it looks as fair
    as you'll get from the BoD especially given that they are potentially
    all about to lose their DCU job!

    
    Re: .20
    
    >Whether this is meant to be manipulative by what it does and doesn't say 
    >is questionable.  To be honest it looks like it is just reporting what
    >happened from their perspective and what they are doing about it.  One
    
    I think it's significant that they chose in some instances to report
    precisely what occurred i.e. the vote on agenda item 2, and in others
    to report from their "perspective."
    
    The following are facts with no "perspective" involved:
    
    	o There was a vote on the third agenda item.
    	o Agenda item 3 passed overwhelmingly on a voice vote.
    	o Agenda item 3 directed them to do what they are doing.
    	o The letter gives the BoD credit for choosing to do what
          in fact it took a special meeting to force them to do.
    
    I agree that perhaps it might be the best we could expect of them,
    but I don't see it as anything other than their continued, defiant,
    resistance to being answerable to the membership.
    
    fwiw,
    Steve
    

.12 seems to think DCU doesn't pay dividends.  In fact, that's all
it pays on so-called "savings" and "checking" accounts.

Credit unions do not pay interest on deposits--they pay dividends
on shares.  Similarly, credit unions are not allowed to provide
checking accounts, though they are allowed to provide share drafts.
It's been a few years since I last checked on restrictions for
federally-chartered credit uniions, but here are a couple of the
differences I recall:
  - dividends can't be at a guaranteed rate
  - share drafts clear slightly differently from checks, and at
    higher cost to the institution they are drawn on
  - checks must be returned to the writer (though some banks offer to
    "store" them for you on microfilm, for a fee...)
These differences are mostly technical, but I was surprised that DCU
glosses over them most of the time (e.g., referring to "checking
accounts").

A credit union I previously used at one time posted account "interest
rates" with the label "expected dividends".  At the end of the dividend
period (monthly), actual dividends were posted to the account, sometimes
higher, occasionally lower than the expected rate, based on how they'd
done that quarter.

At a CU, you don't really deposit or withdraw funds--you buy or
sell shares.

    
    I believe it's a bit too much to expect the current BoD to change their
    mode of operation & communication at this point in their life.  We
    either learn to live with it or replace them if we want better.
    
    What we now know and can document is a pattern of selective, open
    communication and cleverly worded writeups which mask or avoid what
    really happened and the facts.  The sad part about all this is that the
    vast majority of DCU members have access to ONLY this "information". 
    And that is what the current BoD is relying on to save their DCU
    positions.  They have used DCU's communications to "keep the membership
    informed".  Everything they have put out has portrayed the BoD as
    either acting correctly or saving us money.  They have not scratched
    the surface of what they were doing for the last x years while Mangone
    seems to have had the run of the credit union.  And where was our
    Supervisory Comm.?  There was and still is a Board member on it and yet
    it was allowed to not perform its job.
    
    If many DCU members are to get the full story then it will have to be
    communicated by means other than DCU's letters.  Considering 25% of
    DCU's membership does not work for DEC, I would think full page newspaper 
    ads in some key newspapers would do the trick.  Anybody know how much 
    they cost?
    

re .22

Although the interest the DCU and other credit unions pay on accounts is
called "dividends", that's really just a word game -- brought on, no doubt,
by the legal restrictions on a credit union paying "interest".  In all
practical respects, the "dividends" that we are paid on our share and
share draft accounts are really the same as interest payments one would
get from a bank -- including the way the IRS makes you treat that income 
on your tax forms.  

However, I understand that prior to 1985, the DCU paid out real dividends,
which is to say, it paid back a portion of its profits to members at the
end of each year, in addition to the "dividends" paid throughout the year 
to accounts.  I don't know if that's true of my own experience, but I've
heard that that was the case.  As .22 says, that kind of dividend cannot
be at any guaranteed rate -- the financial institution is allowed to say
what prior dividend rates have been, but that's it.  

	Enjoy,
	Larry

PS -- Credit Union checks clear differently from those at banks?  That's
news to me.  I do know that the DCU thinks that the rules on how long 
banks can take to clear checks apply to them as well.  LS

    
    Re: .24
    
    No, "dividends" and "interest" are two different things.
    
    Interest is posted and paid on the deposits of each account which
    earns interest.
    
    Dividends are the returns from profits made on overall DCU operations
    i.e. loans to members, fees for services, etc.
    
    Strictly speaking I think interest income and dividend income are
    treated differently by the IRS.  
    
    Steve
    

�    Strictly speaking I think interest income and dividend income are
�    treated differently by the IRS.  
    
    Not if that dividend is paid by a Credit Union.  Check the instructions
    with your next tax return.  It explicitly states that Credit Union
    dividends are treated the same as bank interest.

To summarize:

Technically speaking, all of the money the DCU pays out, both monthly
or quarterly on deposits, or at the end of the year from profits (if
they ever do that again) is called "dividends".  In particular, the
"interest" paid on deposits every quarter is labeled "deposit dividend"
on the statements.

But for all practical purposes, the "deposit dividend" is really interest,
and that's how the IRS insists that we treat it, too.  Just like a share
draft account, for all practical purposes, is really a checking account,
even thought credit unions aren't allowed to have "checking accounts".

Whether or not a real profit-sharing dividend is also treated by the IRS as
interest (which I believe is the case) is, alas, a moot question.  However,
if Digital paid "dividends", then those would indeed be treated differently
by the IRS than the "dividends" that the DCU pays us.

	Enjoy,
	Larry