STAY TUNED. STAY VSECU
Stay tuned! Stay VSECU!
Click here: Things You Should Know for the latest news about Calling All Members efforts to save VSECU, Vermont's 75 year old statewide financial cooperative. Help us stop the proposed merger with New England FCU. There is no Vermont in New England Federal Credit Union! Let’s keep our Credit Union and find new leadership! Sign the petition. Resolve to vote NO when the time comes.
Read below for some fresh facts!
Less than seven hours to give away 75 years! We're getting closer to the truth!
The VSECU Board of Directors claims to have spent a lot of time in Executive Sessions evaluating the New England FCU merger, engaging with New England FCU Directors and determining how “remarkably aligned” the two institutions are.
Based on excerpts from Board minutes (which we were very reluctantly provided) those statements appear to be brazenly false.
We know that the two CEOs started their merger discussion in October. Now, we also know that after three executive sessions lasting a total of 131 minutes, the Board executed a letter of intent to merge with New England FCU. We know that Rob Miller was the only person to meet with the Board during those 131 minutes of discussion and that there is no evidence the Board sought any outside input. Instead, what the record shows is that, in slightly over two hours, the Board decided this specific proposed merger was in the best interest of VSECU members.
We know too, that in January and February, four more Board meetings were held with a total of four hours of Executive Session. The Directors spent 1 hour with the NEFCU CEO, who certainly was eager to takeover VSECU for free. The minutes also show the VSECU’s Chief Financial Officer attended two executive sessions. The Directors did not consult with any other members of the Senior Management Team. Furthermore, the minutes do not show any proof of consultation with any New England FCU Board members or any independent industry professionals. Yet, the Directors went to the last Executive Session prepared to “unanimously and enthusiastically” sign the Merger Agreement that would result in the surrender of VSECU’s independence, identity, members and assets.
How can the Directors still claim they performed their fiduciary duty to the members they were elected to serve. All the information we have makes it clear the CEO intentionally kept most of his senior team away from the Board and single-handedly convinced the Board to merge with New England FCU. We’re only revealing what the official minutes show.
That truth is, in less than seven hours our Board of Directors voted to put an end to the 75 year life of the Vermont State Employees Credit Union. Doesn’t this alone explain why four former Board Chairs and its former CEO believe VSECU members should reject this merger, keep our credit union and find new leadership?
We’ve been trying to make up for this fiduciary failure. We’ve been trying to get answers to many tough questions instead of just listening to the sales pitch we are being given. We’ve asked for a full and complete copy of the Merger Agreement. That request was denied. We’ve asked for copies of the CEO’s employment agreement and details of his Supplemental Executive Retirement Plan. Those too, have been withheld.
Those documents would help us learn how CEO Rob Miller’s total reportable compensation today compares to the $407,361 he received in 2020 (based on IRS 990 Tax Returns) and what it will be as COO/President of New England FCU. Those documents would help us learn what happens to Rob Miller’s $3M Supplemental Executive Retirement Plan the Board gave him in 2020 (again, based on IRs 990 Tax Returns).
We would like to know if the terms of the retirement plan include a full payout in the event of a merger. If that’s the case, it might explain why the CEO has spent so much time these past two years trying to merge VSECU with any credit union whether in-state or out-of-state.
We’ve asked questions that members have a right to know before voting on this proposed merger. Yet, all we get is: trust us, bigger will be better.
If trust in leadership is a reason for us to giveaway our credit union, how can we trust what we hear when it is disproved by official records? How do we trust when material information is being withheld preventing the disclosure of important financial arrangements?
We’re being told that this is a merger of opportunity. We agree it is an opportunity for someone – just not for the members. This merger does not provide any material benefit to VSECU members and distracts VSECU from serving its members and being dedicated to being the credit union built by Vermonters for Vermonters.
To bring this proposal to an end as early as possible, we have initiated a VSECU Member Petition. With the signatures of 1% of the membership, or about 750 members, we can demand our own Special Meeting and call for a vote on a resolution requiring the Board of Directors withdraw from the Merger Agreement. Members can view and sign the petition at callingallmembers.org. If the petition is successful, all eligible members will be given the opportunity to vote on the resolution to withdraw from the merger, either by paper or electronic ballot.
Let’s keep our Credit Union and find new leadership! Visit callingallmembers.org and sign our petition to help save VSECU!
Read merger commentary by a nationally renowned credit union leader.
A Member Raises an Abiding Question both Topical and Troubling
By Chip Filson on Apr 29, 2022 (Reprinted and edited with permission) Follow his blog Just a Member at chipfilson.com)
While traveling yesterday I was copied on an email between two credit union members. The sender asked in part:
“I belong to five different credit unions. I’ve clawed my way onto the supervisory committee of one of them. Alas, the Board of one has recently approved a deal by which it will be swallowed up by the biggest credit union in the state. . . When the deal was announced I wrote asking for whatever merger documents they could disclose.
I heard back directly from the CEO, who cheerfully explained they would be disgorging absolutely no documents. It appears to me that the board and management actually expect the membership to ratify this deal entirely on a “trust me” basis. . . literally every justification that has been publicly offered comes down to some version of “bigger is better.”
A Game without Rules: Credit Unions Become Commodities
Mergers are being undertaken by sound, well established, and stable credit unions not to better serve members but rather to make life easier for their leaders.
Instead of cooperative communities expanding long-time member relationships, these transactions treat credit unions like a commodity. Leaders who give up their fiduciary positions to an outside third party without engaging the owners prior to the decision and who must approve this charter cancellation.
This is the situation the above mentioned member’s email describes. And it applies to hundreds of thousands more members who end up becoming just consumer accounts to be bought and sold.
Credit unions and cooperative design is supposed to protect member-owners from self-dealing leaders and board toadyism. But today mergers lack transparency, public disclosures of strategy or benefits, and certainly no post acquisition accountability. These are private deals negotiated by CEO’s putting their interests first and then announcing their intent to members.
The member vote is merely an administrative process without substance where very few members even bother to participate. All the messaging, resources and formal requirements are under the complete control of the persons benefitting from the transaction-not the members who must approve the decision.
What can members do? How can the supposed democratic one-member, one-vote governance model be revitalized to ensure member interests are front and center in these self-dealing transactions?
Topical and Troubling
If the situation is familiar, it is because it happens weekly. Not mergers, but member-owners cut out of the process entirely. Private deals supported by rhetorical promises and void of any objective facts.
Here is how Warren Buffet once described corporate mergers.
Overall, the deck is stacked in favor of the deal that’s coveted by the CEO and his/her obliging staff. It would be an interesting exercise for a company to hire two “expert” acquisition advisors one pro and one con, to deliver his or her proposed views on the a proposed deal to the board—with the winning advisor to receive, say, ten times a token sum paid to the loser.
Don’t hold your breath awaiting this reform: the current system whatever its shortcomings for shareholders, works magnificently for CEO’s and the many advisors and other professionals who feast on deals. (Source 2019 Annual Report, Berkshire Hathaway Inc. pgs. 12-13)
About Chip Filson
A nationally recognized leader in the credit union industry, Filson is an astute author, frequent speaker, and consultant for the credit union movement. He has more than 40 years of experience in government, financial institutions, and business. Filson’s experience makes him an authority on a range of topics, including analysis of credit union trends, credit union public and market-facing opportunities, and strategies for enhancing member value. His belief in the cooperative movement has made him an advocate for corporate credit unions, dual chartering, CUSO’s and regulatory reform of NCUA.
Chip Filson
It's Spring! Let's GROW!
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Here's the latest news....
Even though we all get busy during Vermont's prime time, please do all you can, whenever you can, to encourage members to help save VSECU. All of us working together can preserve a great Vermont institution.
We appreciate the encouraging emails and comments coming our way. We look forward to hearing suggestions on how best to defeat the proposed merger.
Please Stay Tuned so that together, we can Stay VSECU.
Now is the time to GROW Calling All Members every day! By GROW, we mean....
G – Gather more information. When you know more, we will be stronger.
R – Recruit more member participation.
O – One member- One Vote. Be engaged as a member-owner.
W - Work to defeat the merger proposal and save VSECU.
We don’t think it will be hard to grow our ranks of supporters but it will take persistence. It does not take much to simply ask another member to visit callingallmembers.org and learn more. We are after awareness and perspective. When members are more informed, we believe we will get stronger!
During the merger application process ahead, we intend to gain access to all documents that are relevant to the merger. That starts with the Merger Agreement. Members who are being asked to approve a merger should have access to the entire Merger Agreement.
We will also be sure the regulators know our objections to the proposed merger. We will ask the regulators to insist on as much transparency as possible. We will ask them to oversee a fair voting process - one that does not allow the tally of electronically submitted ballots to be disclosed to anybody until the election period is closed.
We will also keep investigating the process that resulted in the merger agreement. The more we learn about the process, the more it appears there has been a monumental failure of due diligence which is now being covered up with misleading information. Check other pages on this site to learn what we have learned.
Our experience allows us to undertake the due diligence that has been missing and to address the conflict of interests that have shaped this merger proposal. We intend to do that!
Thanks for your support! We enjoy working with you to save VSECU.
SDP/MJD/KBC/WF