BURNSVILLE, Minn.–The former CEO of one of two large credit unions here that have announced plans to merge is calling the reasons for the merger “weak and purely boilerplate points” that are “hardly compelling.”
The former CEO is further saying its “imperative” members of the two credit unions be given “full, unfiltered transparency to the total costs imbedded in this proposed merger.”
As CUToday.info reported here, the $1.58-billion TruStone Financial Credit Union and the $1.42-billion Firefly Credit Union said they plan to combine to form an institution that would have more than 188,000 members. TruStone Financial would be the surviving name and brand, and it will convert to a state charter as part of the deal.
Bill Raker, the former CEO of Firefly Credit Union who retired in 2019 and who is well known to many in credit unions, said in a Facebook posting that the credit union, the oldest in Minnesota after having been chartered in 1925 as Minneapolis Postal Employees before changing its name to U.S. Federal Credit Union, and then Firefly, has a “unique heritage” that is “about to evaporate under the proposed merger with TruStone Credit Union.”
The Real Reasons?
“The reasons being offered for why the boards voted to merge are weak and purely boilerplate points that are always given for any such merger—hardly compelling,” wrote Raker. “Both credit unions are reputable, healthy and viable and do not need the other to survive and continue to grow. One may seriously wonder (question) about the real underlying reasons this merger is being proposed. Specific concrete quantifiable (guaranteed?) meaningful benefits for the members of either credit union are purely subjective and, at best, minimal, inconsequential. Doesn't it seem reasonable, and highly desirable, that members of both credit unions can be better served and enjoy the potential for better benefits if there are two credit unions soliciting their business than if there is only one?”
In a statement announcing the merger plans, TruStone Financial CEO Tim Bosiacki, who has announced retirement plans effective in January 2021 at the completion of the proposed merger, said, “This merger is a true strategic partnership, one highlighted by the fact that we’re working collaboratively to determine best practices for the combined organization. Together we would increase our presence across Minnesota and southeast Wisconsin resulting in more access for our combined membership. Simply put, this merger is a win-win.”
Who Pays?
But in his Facebook posting, Raker questioned the value for Firefly Credit Union members.
“If, in this proposed merger, Firefly Credit Union gives up its unique heritage, its long honorable history, its people-focused culture, its indisputable legacy of exceptional service and proven value to its loyal members and the communities it serves and calls home, does it really gain anything significantly more or replace all of that with anything that can possibly supersede it?” wrote Raker. “Can any possible (proclaimed?) gains convincingly overwhelm the obvious losses? The members of Firefly get to ultimately decide with the opportunity to vote on the proposition.”
Raker went on to write, “Mergers always cost big money. Who pays? In the case of the proposed Firefly/TruStone merger, it's the membership. As member-owned democratically governed cooperatives, credit unions have historically been forthcoming with information that impacts the members' financial wellbeing. It's imperative that members of both credit unions are given full, unfiltered transparency to the total costs imbedded in this proposed merger. Let's see line item by detailed line item what the members' dollars will add up to for all related expenses if the merger is approved by vote of the Firefly membership.”