Conference 7.286::dcu

    
    RE: .0
    
    I would agree with your point of view if DCU was a bank.  But it is a
    credit union which allows membership participation.  Many intend to
    exercise that right to make DCU a better credit union than it has been
    in the past.  Also, make sure it stays as credit union which serves it
    members and not outside interests.
    
    Just curious, what do you like so much about DCU?  Do you think it can
    be improved in any areas?
    

	The DCU is part of my compensation for the job I do at Digital.
	Why should I give up a part of my pay because someone is trying
	to reduce its value? It seems it would be more productive for me
	to prevent those trying to reduce its value from doing so.


						Tom_K

Let me assure the author of .0 that I, like many other noters, also like the
DCU.  My recent auto loan, for example, was a very pleasant experience.
I also really like the convenience of auto-deposit into multiple different
accounts, and the convenience of having a DCU branch and ATM in the lobby 
of my building.

However, liking all these things about the DCU doesn't mean that I need
to approve of all of the policies and actions of the Board of Directors.
If you (author of .0) like the actions of the current Board, then that's
perfectly fine.  You have a right to that opinion, just as I have a right
to try to change the Board rather than simply leaving if there is something
that I don't like.

But I am curious -- do you mean in .0 that you like the DCU taken as a 
whole (as I do), or do you mean that you like the way DCU employees have
treated you (as I do), or do you mean that you like the way the Board of
Directors has acted and the policies they have made?  If you like what
the current Board is doing, then by all means vote to return them to
office.  

However, if you simply like the DCU as an organization, then please 
accept my assurances that I do too, and that is one of the main reasons
why I am opposing many actions of the current Board.  If you'd like to
talk specific cases, either here or privately, I'd be glad to do so.

	Enjoy,
	Larry

                     <<< Note 398.0 by RAVEN1::GALLASPIE >>>
>                         -< " Don't Like it Leave it" >-

 

	Thanks for the advice.

	I, like you, joined the day DCU opened. I didn't choose to leave
	when the "Choices" brochure showed up. I DID decide to leave
	when the BoD would not admit that they had failed the membership
	in a BIG way, when they refused to supply information to concerned
	members, when it was shown that they deliberately withheld the 
	auditor's note attached to the annual report, when they refused to 
	answer questions regarding possible election improprieties.

	For ALL of these reasons, I decided to leave the DCU. Thanks for
	showing me that I "did the right thing".

Jim 

    Where did .0 go?

  Obviously he didn't like it so he left ;-.] ;->]

    Here is the original basenote with the author's name removed:
    
    
================================================================================
Note 398.0                  " Don't Like it Leave it"                  7 replies
xxxxxx::xxxxxxxxx                                    18 lines  22-NOV-1991 07:29
--------------------------------------------------------------------------------
    
       I've been reading this note file fore a wile now.
    
       I only have one thing to say, " If you don't like the 
    
       DCU then bank some where else ".  I love them to death
    
       and they have assisted me many of times.
    
       Been a member from day one and plan on being one till
    
       I leave DEC and I might even stay after that.
    
       " I Vote keep the BOD " and let's get on with trying to
    
       save DEC. 

    
    Who is  xxxxxx::xxxxxxxxx. COuld it be the BoD (in disguise) has chosen
    to visit this conference?  !^)
    
    

If you want to know who the base note author was, see .5.

    The Mystery Person is NOT the BOD.  I communicated with him
    off line about his reasons for removing the note.  Basically, he
    felt intimidated by the general tone of the responses and didn't want
    to be beat up any more.
    
    There is no grand conspiracy here.  Please stop looking for one.
    
    

    <<< Note 398.11 by LEDS::PRIBORSKY "D&SG: We are opportunity driven" >>>

>    The Mystery Person is NOT the BOD.  I communicated with him
>    off line about his reasons for removing the note.  Basically, he
>    felt intimidated by the general tone of the responses and didn't want
>    to be beat up any more.
    
>   There is no grand conspiracy here.  Please stop looking for one.
    
	I didn't get a sense that anyone is looking for a grand conspiracy
	from the previous replies to this topic. And I also don't read
	anything that is the least bit intimidating about them. In fact,
	it seems to me that repliers went out of their way to be considerate
	of the original opinion. If the base noter saw these replies as
	getting "beat up"  then he is thin-skinned indeed and ought not to
	be entering fractious opinions in a notes file in the first place.

	Particulary ones on the "love it or leave it theme." I have a whole
	lot of trouble with that mentality in regards to any controversy.
	It's not representative of thoughtful consideration of an issue,
	but is strictly a gut reaction that ignores any reasonable basis
	for differences of opinion.

	I think that the majority of noters in this conference are much more
	tolerant of opposing viewpoints than they are credited for. Sure,
	some of us overreact sometimes...but those types of reactions have
	occurred on *both* sides of this issue.	I very much disagree with
	statements that noters are only welcome in this conference if they
	agree with the majority opinion -- especially with regards to 
	potential participation by the BoD/DCU representatives. If you are
	willing to express a minority opinion in *any* forum, you can expect
	a reaction by the majority...and it works both ways - keep in mind
	that the majority in this notes file is a minority of DCU shareholders.
	Just as you would expect the majority in this conference to recognize
	and respect minority opinions, we can expect DCU to recognize the
	opinions and concerns expressed herein. I for one am looking forward
	to their participation, and hope that it is sincerely  motivated by
	a common desire to improve communications both before *and after*
	the upcoming election.

	Jim

    
    RE: .11
    
    "felt intimidated by the general tone of the responses"????
    
    Give me a break.  The tone of the original posting was 100 times more
    intimidating than any of the replies.  I agree 100% with .12.
    
    As for a "grand conspiracy", I took the reply to be humerous.  Maybe
    you should stop looking for people implying a grand conspiracy.
    

	He felt intimidated by the responses to *this* string?

	The replies to .0, before it was noted that .0 was gone were
	simple questions, posed in a moderate tone. I don't understand
	how they could have been *less* intimidating...

					Tom_K

Well, money talks and mine says, "Bye."

Seriously, at the moment I'm keeping my DCU accounts for the priv. of voting in
the next elections.  I'm considerably happier with my now-diversified
banking environment.  I'm using a commercial bank for safe deposit and free
checking.  I'm using another credit union for savings and day-to-day ATM
access.  I'm using a discount broker for my money markey account.  I will
probably use either a commercial bank or a mortgage company to refinance my
house.

My commercial bank and credit union are open 'till 7PM nightly and Saturdays.

My credit union Visa card is 13.4% with no fee.

My money walked for four reasons:  the Information Protection Policy, higher
rates than I can get elsewhere, lower interest than I can get elsewhere, and
greater convenience.  I like the people at the CX02 credit union and would do
business with them were it not for the other factors.

BobW

	I'm out as well, except for the minimum share account ($5)
	and owing them a bit yet on my CRT.

	All in all I feel better not doing business wit an organization
	for which I have no respect.

	After the election I may review my decision, but for now I no
	longer consider myself to be a member.

Jim

    
    RE: .15 & .16
    
    And there are many, many more like you.  This undocumented loss of DCU
    members and money will hurt DCU in the future IMO.  At a time when the
    membership was suffering other hardships, DCU added to them.  They
    should have been working WITH the membership in these tough times. 
    This is the type of behavior one would expect from a credit union.
    
    I fear the amount of future business lost due to the past and current 
    policies and actions of our "credit union" and BoD will come back to 
    haunt DCU down the road.  Is DCU just another short sighted American
    business that is willing to forsake long term health for short term
    profit?  We'd better hope the Japanese aren't allowed to open credit
    unions... ;-)
    

       I'm down to the $5 minimum also. I kept it in order to vote, but
    it's also necessary until I pay off my stock loan. If there is a
    significant turnover in the Board, I'll come back.
                                        Denny

    Is it fair for members with no vested interest (I don't consider 5 bucks
    to be vested) to have a say in who runs the credit union and how it is
    run?

re: .19

Any member has a vested interest in THEIR credit union.

Bob

>    Is it fair for members with no vested interest (I don't consider 5 bucks
>    to be vested) to have a say in who runs the credit union and how it is
>    run?


  
   Yes.  Voting should not be based upon $$ in the bank.  It should be as it
currently is: if your a member, you have a vote.  Otherwise you end up with
a battle to define what $$ amount is considered as having a vested interest,
and there are obvious problems with votes/$$ approach.


   Just my opinion though.



                Happy Holidays!

>    Is it fair for members with no vested interest (I don't consider 5 bucks
>    to be vested) to have a say in who runs the credit union and how it is
>    run?

But they do have a vested interest in how the DCU is run.  They used to
have lots more money in the DCU and want to have it there again.  The
DCU is one of our employee benefits, after all -- everyone who wants to
keep money in the DCU has a vested interest in how it is run.  

Also note that these people with just $5 in an account have said that
they'll bring money back if they like the election results, or close the
account entirely if they don't.  The $5 savings account is a temporary
protest -- the most effective voice some people think they've got.
And that in itself shows that something is wrong with this supposedly
cooperative (i.e. member run) organization.  

	Enjoy,
	Larry

>    Is it fair for members with no vested interest (I don't consider 5 bucks
>    to be vested) to have a say in who runs the credit union and how it is
>    run?
       Absolutely! Check the bylaws, $5 is all it takes. How about:
    Is it fair for stockholders of DEC with only 1 share to be allowed to
    vote?
                                        Denny

    
>    Is it fair for members with no vested interest (I don't consider 5 bucks
>    to be vested) to have a say in who runs the credit union and how it is
>    run?
    
    It's not only fair, it's the way it should be.  Credit unions are not
    elitist financial institutions set up for the wealthy or for those who
    have a certain amount of dollars.  How would you like it if the amount
    of money required to vote was $20,000 and you had $10,000 on deposit? 
    To some big fish $10K is peanuts.  To me, it's real money.  As with
    most of these discussions, it comes back to the "credit union
    philosophy".  Without it, a Director with all the qualifications in the
    world won't do a good job IMO.
    

    Re: "Is it fair for members ..."
    
    Just remember: If life were really fair, *men* would ride sidesaddle.
    
    Steve

I still don't think DCU is getting hurt by those who withdraw all their savings,
and especially not by those who withdraw all their savings, but still owe on a
loan.  As a matter of fact, I think this is what DCU wants.

DCU have told us repeatedly that their biggest problem now is being cash rich.
As a matter of fact, I was personally witness to one comment from a DCU official
which made me feel sort of like a "deadbeat" for not borrowing more money.

Ok, so DCU (and a bunch of other credit unions) are cash rich.  DCU's tight with
what they lend, and even if they aren't anymore, it doesn't matter since 
virtually no one's asking for a loan anymore (if we're to believe what we've
heard).

So, they're having a hard time loaning the cash out.  What's the other option?
Get rid of the cash - have a bunch of depositors walk away with their deposits.
It increases the percentage of their assets that are generating loan revenues,
and in this case, it decreases the number of members who are complaining.

If people are closing their accounts AND loans at DCU, then it's a problem.  If,
on the other hand, a disproportionate number of dollars are being withdrawn,
without a corresponding number of loan dollars being paid off, then DCU's
balance sheet looks better (Cape Cod "investments" notwithstanding).

As far as I can tell, were I to remove my money from DCU, I'd have the BoD right
where they want me.

    I don't understand how DCU can have too much cash at the same time that
    they are experiencing RE losses, feel they have to increase reserves,
    can't give better rates for savings or for loans, feel they have to do
    more car loans instead of mortgages, and can't afford to continue providing 
    free checking.  What's the reasoning behind this?  I thought that
    having lots of cash generally tends to make doing all this stuff easier.
    
    Steve

Well, you're right, but:

Every time I've heard Chuck C talk, the clear message that *I* got was that 
Mangone's deals notwithstanding, the biggest problem they have right now is
their capital asset ratio, which is earnings divided by assets, and earnings
are down because they can't find enough high interest loans to make, forcing
them to invest in lower interest "investments", which in the end messes up
their capital asset ratio.  Therefore to fix, increase the numerator (return
on investments), or decrease the denominator (assets not generating revenue).

Someone correct me if I got the wrong message.

As for having to increase reserves:  That's the NCUA telling them to cover their
anticipated losses on the bad RE loans.  Cashing out like that means that the
other money, not in reserves should be working overtime to generate even more
revenue - to cover the reserves covering the anticipated RE losses which aren't
generating any revenue - thus making it even more important to find high
interest loans to invest the non-loss money in.

Ironically, high interest loans also tend to be riskier, which ultimately fuels
the process of covering bad loans, investing what's left in higher still loans,
etc.  Sort of like what's happened to the S&L industry.

.26>  As far as I can tell, were I to remove my money from DCU, I'd have the
.26>  BoD right where they want me.


(Heh, heh.  Cute.)

And anyone who closes their accounts even more so -- it must be the BoD's
sweetest dream that by Spring all those who are unhappy with the BoD's
performance should have "shopped elsewhere", and be ineligible to vote.

As a result of some private communications (NOT with the author of the
base note), I get the impression that the thing that intimidated him was
*not* the replies to his note here (which was what was implied in .11).
Rather, that what intimidated him was some private email that he got.

I don't know if this is correct, but I do know that there are some heavy
duty email flamers out there.  I've gotten burned by pro-board email
flames, and there are surely some anti-board flamers out there.  
Generally, one can find flamers on both sides of every issue.  

All I can say is, if someone's note makes you *MAD*, then please don't
reply to it.  Wait until you aren't mad.  And also, if someone has the
bad taste to say in a note that you are incorrect, please don't assume
that they are attacking you personally.  They may just mean that they
don't agree with you.  

	Enjoy,
	Larry

    
    RE: capital-to-asset ratio and too much money
    
    Having too much money should not be a problem for DCU.  They should
    always be able to cover what they pay depositors with what they make on
    the excess deposits.  The latter should always be at least a little
    higher.  DCU has run into trouble because its years of uncompetitive
    loan rates and approval hoops have come home to roost.  They now have 
    an insufficient consumer loan portfolio.  Consumer loans is where DCU 
    makes the money it needs to pay dividends, cover the cost of
    operations, make a little profit to stash away in equity, and maybe,
    just maybe, pay a bonus dividend.  But they are still making money,
    nonetheless.  Just not as much as they want to make.
    
    The capital-to-asset ratio is ONE measure of an institutions health and
    solvency.  It is not and should not be a figure to be achieved at all
    costs.  Chuck Cockburn is in a very big hurry to fix the damage done to
    this ratio by the participation loan losses.  Since borrowing is flat,
    fees is the other potential source of income to built up the bottom
    line.  DCU is a healthy and solvent institution and will remain so AS
    LONG AS IT ACTS LIKE A CREDIT UNION.  It ventured into the commercial
    real estate realm and its huge risks.  The capital to asset ratio WILL
    increase, given time.  DCU's equity WILL increase, given time.  Yes,
    the growth will be slow but there is nothing wrong with slow, steady
    growth.  DCU has to adjust to the changing times.
    
    Look LONG term DCU.  Build UP your membership base, and don't drive members 
    away.  The people with low deposits usually borrow money.  Don't look 
    at them as deadbeats.  Look at them at a pool of potential borrowers. 
    That's where you make your money!  We have seen how other institutions
    have drooled over and snapped up disgruntled DCU members.  They don't
    seem to have a problem with keeping holding their money for them.  Work
    to get your loan rates where they should be DCU.  Offer incentives for
    members to borrow.  Isn't an 8% car loan to a member better than
    parking the money and making 5%?  The membership has proven to be the best
    "investment" for the past 10 years.  And we'll be the best investment
    for the next X years...
    

    
    RE: .30
    
    People sent flaming mail to .0???  This is totally inappropriate
    behavior IMO.  .0 didn't ask to correspond by mail.  He posted a note. 
    People should reply in kind and not send nasty mail.

Could someone fill me in on who's money DCU is lending out for
mortgages when the sell all their mortgages on the secondary market?

Mine was immediately sold to Banc Boston and I got a notice that
now it's being sold again to Sears Somethingorother Corp. 

My guess: It looks like DCU is acting like a middle-man, originating? the 
mortgages and keeping some small fee. At this rate no wonder they have too
much cash.

    This sounds like mortgage banking to me. You get $$$ when you sell
    loans. Do Credit Unions typically act like mortgage bankers?
    
    I thought we had too much cash, and wanted more loans.
    
    I'm confused. If we need more loans and less cash, why are we
    selling loans for cash?
    
    

>	DCU has been issuing mortgages for many years
>	now, and probably has lots of  them on the books at the
>	moment.

	In my conversations with the DCU loan originator, I was led
	to believe that DCU rarely, if ever, held onto mortgages,
	and usually (always?) resold them...

					Tom_K

DCU gets something for selling the loan, now, not over time.  What
Chuck said, at one of his "open" sessions, was that DCU would start
SERVICING the loans (sending you the bills, etc) even though they
might no longer have the loan on the books with their money.

They can collect a fee for this also, and it makes it feel like you
have a mortgage with them still.

re .36:

>	In my conversations with the DCU loan originator, I was led
>	to believe that DCU rarely, if ever, held onto mortgages,
>	and usually (always?) resold them...

Chuck said in HL that the DCU opened up (I think it was) $50M for
mortgage loans some years back, and he doesn't want to add any more
real estate loans to the mix, due to risk.

On the whole, that makes sense to me, but I do have two concerns.  First, 
loans for a principal residence are pretty safe provided that they person
holding the loan stays employed.  Sure, we've had layoffs, but working
for DEC is still one of the safer jobs around.  Chuck noted the amazing
repayment record of DCU members on loans in general, surely the means that
real estate loans to DCU members are far safer than those banks make?

Second, I can't help but worry a bit about just what sort of loans that
$50M went into.  Jumbo loans for second and third houses (which is what
the Mangone mortgage seems to be), or normal loans for principal houses?
I think it likely that the loans are fine, but I can't help wondering.

	Enjoy,
	Larry

PS -- This is a case of a "perception problem" -- my perception that the
Board is hiding things, whether just or unjust, causes me to question 
things that I wouldn't ordinarily question.  Please don't criticize me
for it, look in a mirror and recognize that it is human nature.  If you
don't feel the same doubt, it's probably because I trust the Board less
than you do, which is my priviledge.  

    
    The following tables detail DCU's loan portfolio and associated yearly
    losses on them.  They appear to have capped the first mortgage portfolio 
    at $70 million, but have continued growing the second mortgage portfolio 
    and unsecured credit.
    
    
    ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
    Source: Copied from DCU Annual Reports 1985-1990.  This information was
	    contained in the auditors notes.  The auditors notes were not
	    published with the DCU Annual Reports.

    Loans Outstanding:  (in thousands)
                          1985     1986     1987     1988     1989     1990
                         ------   ------   ------   ------   ------   ------
    Automobile           32,962   51,452   44,384   39,803   34,955   33,510
    Mortgage             25,845   74,557   70,691   72,822   69,723   71,553
    Home Equity              --       --   43,338   63,441   81,203   89,457
    Other Secured         3,463    6,082    6,459    7,212    6,411    5,096
    Unsecured            15,124    9,820   15,073   21,153   35,706   39,721
    Participation loans   2,520    8,010    9,886       --       --       --
      with other CU *
    Commercial RE loans *    --       --       --   12,766   15,332    8,727

    * = Description of participation loans changed to Commercial RE loans.
    
    (Note: Participation loans reached a high of $18 million in 1990.
	   The first loan default was in the fall of 1990.)

    ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

    Source: Copied from DCU Annual Reports 1985-1990.  This information was
	    contained in the auditors notes.  The auditors notes were not
	    published with the DCU Annual Reports.

    Allowance for Loan Losses:  (in thousands)
    
    				1985   1986   1987   1988   1989   1990
    				-----  -----  -----  -----  -----  -----
    Balance, Beg. Year		 540   1161   1159   1272   1429   1533
    Provision Charged to	 747    243    240    240    240   4406
       Operations
    Loans charged off (members) (130)  (284)  (187)  (140)  (173)  (283)
    Paricipation loans		                                  (2696)
       Charged Off
    Recoveries			   4     39     60     57     37     21
    Balance, End Year		1161   1159   1272   1429   1533   2981
    
    (Note: $2,696,000 loss on participation loans in 1990.)

    ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~