The merger debate on the West Coast has heated up! Many SAFE members are actively questioning the financial and economic benefits of this newly proposed creature - SAFE++ or Tukwilapus?
The SAFE Board seems to realize that they've mismanaged this move to extinguish SAFE, by failing to engage SAFE members in the discussion for over a year. The lack of transparency (and abundance of hubris!) by the Board has inflamed opponents. Board panic seems to be growing.
As a last resort, Henry Wirz, the much admired and long retired CEO of SAFE, has been called into the fray with a letter of support [link]. Henry's principal thesis in support is: "
Think we all know that idea is not true. SAFE CU ($4.5 B) is currently one-seventh the size of Boeing Employees' CU ($30B). The advantages of "scale" at Boeing are not apparent as it operates at a much higher cost (3.43% vs 2.59% exp - 32% higher costs at BECU!) and BECU rates on loans/deposits are generally less favorable than at SAFE CU [link]. In fact, SAFE members appear to lose all the way around [link]!
✔ History repeating itself? Mr. Wirz also promotes scale as the deciding factor by referring to his past experience: ""
😎 That "$30 billion credit union" was Wescorp - the largest credit union failure in history.
According to NCUA:
"A. Why NCUA Conserved Western Federal Corporate Credit Union:
WesCorp‘s management and Board of Directors (management) did not implement appropriate risk management practices to adequately limit or control significant risks in its investment strategy "
[Material Loss Review of Western Corporate Federal Credit Union (Opens new window)]
WesCorp began operations in 1969 as the California Central Credit Union,. The field of membership was expanded in 1975 becoming the nation‘s first regional corporate. Prior to obtaining a national field of membership (FOM) in 1999, the FOM included federal and state-chartered credit unions
in Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon, Washington and territories of Guam and American Samoa. In 1998 and 2003, mergers were accomplished with Idaho and Pacific corporates."
[Does this kinda look familiar, ringing any alarm bells?]
😎 "At scale" - "The bigger the humbug, the better people will like it." — P.T. Barnum
