Crunch Time!
The SAFE member vote on this proposed merger concluded last night at 6:30pm (PT). Approval requires a majority of all 250,000 SAFE Members to vote in favor.
The SAFE CU merger has raised numerous concerns nationwide. The merger appears to fail every test of financial prudence, member-owner equity, and positive community impact. [link] California is widely known for its activism in the arena of consumer protection. If California state regulatory authorities approve the SAFE/BECU merger, that approval will be used as an endorsement for a wide open, "anything goes, everything is okay" national merger assault.
✓ Much is at stake nationwide pending the SAFE/BECU decision;- Mergers and consolidation are prevalent among most American industry segments and institutions. Credit unions have enthusiastically joined that stampede . Much evidence shows that this trend leads to less competition and higher prices for consumers. SAFE CU has a lower cost of operation and better loan/deposit pricing than BECU.
- Any benefits to SAFE members which might occur through a merger with BECU can be obtained without forfeiting their locally-owned credit union. Every SAFE member can join BECU right now, today, for free - no merger required.
- There is no opposition to responsible, financially prudent mergers. But the nature of mergers has changed nationwide with noticeably adverse impacts on local communities, the cost of service to small business, and the quality of service to consumers. [link] Post merger, there will be no assurance that local funds will be reinvested in local communities.
- If the SAFE merger occurs, California will lose regulatory authority over an institution currently serving 250,000 members, with future growth potential affecting 7+ million California consumers. Would outside supervision be superior?
- The commercialization of California credit unions through "growth for growth's sake only" mergers will heighten the competitive tensions with for-profit banks. These type mergers may endanger and cause the loss of the tax-exempt status of all California credit unions. “Credit unions have a mandate from Congress to serve people of modest means, though we repeatedly see growth-obsessed credit unions exploit their federal tax exemption...[Independent Community Bankers Association]"
- SAFE CU, as a $4.4+ billion asset institution, has a market, enterprise value of between $400/$800 million. A real life comparable is the 2025 purchase in California by Frontwave CU of a $316 million asset bank for $56.4 million in cash [link]. The 250,000 members of SAFE are not being compensated for their ownership interests - zip, zero, nada.
- The official SAFE merger notice [here!] provides evidence of up to $15 million in payouts to senior executives and up to $750K in future fees to two SAFE Board members. Immediate payments result from the change in control triggered by the merger proposal.
- This merger does not appear to meet the basic definition and standards of an impartial, arms-length business transaction. The idea of merger was not discussed with SAFE members in advance, terms of the merger agreement have not been disclosed, alternatives/options to merger have not been presented, the required "Special Membership Meeting" to discuss the merger is not scheduled until the conclusion of the member merger vote, and the ballot includes a misleading "vote" on charitable community support.
- California laws provide for majority member approval of mergers [15201.a], which protect credit unions from "rogue" takeover attempts by insiders or minority member factions. Section 15201.b provides the State regulator with authority to independently approve mergers for community benefit, financial necessity, or to avoid potential failure. [link] The minority "rogue" faction supporting this SAFE merger proposal appears to arise solely within a small clique of SAFE insiders.
- The failure of a majority of all SAFE members to vote in favor of the merger proposal will be prima facie proof that 1) SAFE members are pleased with their CU and wish to maintain independent, local control, or 2) see no benefit and much potential harm in the merger, or 3) are unaware and inadequately informed of the merger proposal.
- For SAFE members, Sacramento, and California, there is no benefit in Department of Financial Protection & Innovation rushing into an ill-considered and poorly justified approval. A DFPI merger approval is final and fatal for SAFE CU.
Credit unions are a the fair, responsible solution to the knowledge imbalance between experienced for-profit financial providers and vulnerable consumers. The lack of consumer expertise in financial matters is widely apparent. What consumers do not know, can and does cost them dearly.
Member-owned, non-profit credit unions have served to level that playing field on behalf of their consumer/members. With mergers such as SAFE/BECU, that vital role appears to be ending.
