The SAFE/Boeing Mega-Merger: For Better or Wirz?

  A platypus doesn't have scales! [link]

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: "I believe that scale should serve members." In fact, Henry mentions the word "scale" 7 or 8 times to make sure we don't miss that point! 

✔ Henry claims bigger is better! End of story, suck it up, vote yes for extinction, lets move on!  

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 only answer by referring to his past experience:  "In addition to being SAFE President and CEO, I served on the Board of a $30 billion dollar credit union, including as Chairman of the Board.  I know it is the fiduciary duty of the Board to protect the welfare of the credit union."   

😎 Believe that "$30 billion credit union" might have been 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)]

  "Western Corporate Federal Credit Union (WesCorp) History:
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 

   "Trees don't grow to the sky for a reason" ...  Wescorp, WAMU, Tukwilapus?