DFCU Financial Dissidents Cry Foul Over Huge Payout

DEARBORN, Mich. – Dissident members of DFCU Financial, fighting to oust directors who voted for the ill-fated attempt to convert the credit union to a bank, were stunned yesterday by the credit union’s announcement it will pay a record $17.5 million dividend to members–just three days before a state court is scheduled to hear the dissidents’ case for recalling the board. “It’s like they’re trying to buy back the loyalty of the members,” one of the dissidents told The Credit Union Journal, of the record payout scheduled for just weeks before members are scheduled to vote whether to retain some of the board members. This is the first special dividend paid by the credit union in 20 years. The dissidents, DFCU Owners United, will ask a state court Friday to enforce a credit union bylaw requiring a special meeting where members will vote to recall the board for their support of the failed conversion. Robert Chapman, the newly appointed chairman of the Board, said the huge payout was part of the credit union’s extraordinary success this year in the depressed Michigan economy, which enabled it to also build new branches, introduce several new services, and provide $10 million in subsidized loans to help the area’s auto workers transition to new careers. Chapman was appointed chairman two months ago after the mysterious resignation of Harold Lowman, the main target of the members’ suit for his role in the failed conversion. The $17.5 million payout is by far the largest ever paid by a credit union, dwarfing the previous high of $12 million paid by Clark County CU, in Las Vegas, last January. Later this week, Arizona FCU is scheduled to announce a $10 million special dividend.