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Members Of Failed CU To Be Charged $35 By Acquiring CU

Friday, August 10, 2012 - 6:53 PM
Educational Systems FCU of Greenbelt, Md., has taken over the failed Montgomery County Teachers FCU.

MCT members will be charged $35 each.  "One-time $35 account conversion fee to be charged September 30, 2012."

I found out about it from this news article... not from the credit union. Educational Systems Charging MCT Members $35 Merger Fee

That "newsletter" may have been mailed to members receiving paper statements but the information has been hidden from members who are getting e-statements.   http://www.mctfcu.org/wp-content/...ER_Web1.pd

Members receiving e-statements got this vague comment in the monthly email: "Your MCT Federal Credit Union monthly eStatement is now available to view.  Please visit mctfcu.org and log into Online Banking to view your statement and a special Merger Newsletter.  The newsletter includes important information about the merger with Educational Systems Federal Credit Union including where you can find the latest updates and a new fee disclosure. "  

Additional article ESFCU CEO Says $35 Merger Fee Justified

Tacky.
7
cactuscactus51 posts since
Jan 17, 2010
Rep Points: 382
1. Friday, August 10, 2012 - 9:24 PM
Thank you Cactus. Did not know about this $35 fee. One correction to your post: MCT did not fail, although the merger with Educational Systems was clearly dictated by the NCUA.

Where did you see that the $35 fee was going to be assessed on Sept. 30?
2
loulou541 posts since
Aug 3, 2010
Rep Points: 3,386
2. Friday, August 10, 2012 - 10:21 PM
I would have to think, and certainly hope, that you have the option to close your account rather than have it converted -- and thus not pay that fee. I know it is now past the merger date -- however, if they never notified you in advance, I don't see how they can apply the fee now if you choose to close.

It doesn't seem right to me that CU member are being treated as liable for this. If MCT had simply gone under instead, and the NCUA take it over and merge it with another CU, I'm sure there would have been no fee on members. MCT talks as if the members would have had to pay all the loses if the CU went under, which is just not so.

I have to suspect this merger has already been reviewed by the NCUA and all is legal, including the fee. But it sure seems wrong to me.
1
me1004me1004368 posts since
Jan 16, 2010
Rep Points: 2,559
3. Saturday, August 11, 2012 - 8:00 AM
The fee is "disclosed" on page 6, with details on page 7, of the Educational Systems FCU document in the link I gave http://www.mctfcu.org/wp-content/...ER_Web1.pd

Educational Systems FCU is remarkably inept. Page 2: "...our regulator, National Credit Union Association."

On the other hand, MCT was ordered by the NCUA: "Do not obstruct, delay or interfere in any manner with the merger process... Refrain from imposing unreasonable conditions and restrictions..." http://www.ncua.gov/Legal/Adminis...0027-R2.pd

A nice mess. 
3
cactuscactus51 posts since
Jan 17, 2010
Rep Points: 382
4. Thursday, August 23, 2012 - 4:37 AM
Educational Systems FCU has changed its mind about this fee. According to the Credit Union Times:
The $388 million Educational Systems Federal Credit Union of Greenbelt, Md. is rescinding the $35 merger conversion fee the credit union had decided to impose on its new members following the takeover of the $401 million, 57,700-member Montgomery County Teachers FCU of Derwood, Md.

5
Ken TuminKen Tumin5,467 posts since
Nov 29, 2009
Rep Points: 124,994
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