Valor CU Seeks to Merge with PenFed - Impact To Valor CD Holders?

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Last week Valor Credit Union announced that it is seeking to merge into PenFed Credit Union. In a letter to Valor members, the chairman of Valor’s board of directors summarized the reason for the proposed merger in one sentence:

After considering alternatives, we determined that a merger with PenFed is in the best interest of our members.

Before the merger can go forward, Valor must receive approval from its members. Valor appears to be rushing this through. The vote is scheduled to take place at a special meeting on February 7, 2017. Ballots that are mailed must be postmarked no later than February 3rd to be counted.

The Chairman’s letter and merger FAQs are available at this Valor webpage.

If members vote “yes” to merge, the FAQs state that on “March 1, 2017, your Valor Credit Union membership will officially become a PenFed membership.” Then, on April 1, the merger process will be completed with existing Valor accounts and products converted over to PenFed accounts and products that are most similar.

Last year, the former CEO of Valor pleaded guilty to bank fraud, and he’s now facing up to 60 years in prison. The credit union is also having some financial difficulty. It reported a net loss of $2.25 million in the third quarter of 2016. Both of these problems may have contributed to Valor’s decision to seek a merger.

It’s clear that both Valor and PenFed management are pushing for this merger. Valor mentioned the following perk for Valor members: “PenFed has agreed to pay all of Valor Credit Union's eligible voting members a 1% special dividend based on all regular share account balances as of December 31, 2016.” Note, the special dividend doesn’t appear to apply to CD balances.

Impact to Prime Rate Certificate Holders

Many DA readers are members of Valor Credit Union who have Valor’s 3% Prime Rate Certificates. Also, many of these same DA readers are PenFed members who have participated in many of PenFed’s past CD deals. Thus, this merger is impacting many DA readers, and several have contacted me with two primary questions:

  1. How will their existing 3% Prime Rate Certificates change after the merger?
  2. Will all of their Valor and PenFed deposits remain insured after the merger?

Regarding the first question, Valor’s FAQ #16 addresses it:

Will PenFed honor my Valor Credit Union loan and CD rates and terms?

Yes. All fixed-rate loans and CDs will transfer to PenFed at the existing Valor rate and term. Consumer lines of credit will transfer at either the Valor or PenFed rate, whichever is lower.

A reader also forwarded me information that he received from a conversation with Valor’s CEO. He was told that since this is a voluntary merger, all original terms and conditions of members’ certificates (including the Prime Rate Certificate) will be honored. However, the penalty-free withdrawal option that was offered to members on a temporary basis will not be honored by PenFed since it was not in the original terms and conditions.

The original terms of the Prime Rate Certificates should be a floor rate of 3.04% APY, a 7-year term, an early withdrawal penalty of two years of interest, and unlimited add-on deposits. Over the last two years, Valor has been trying to make detrimental changes to existing Prime Rate Certificates. The latest change was the termination of the add-on option. They also notified some Prime Rate Certificate holders and claimed that the floor rate was actually 0.25% instead of 3%, and that their certificate rate was going to be reduced to this floor.

The second question is important for those with large balances in both Valor’s Prime Rate Certificates and in PenFed CDs. After the merger, will your balance remain under the NCUA insurance coverage limits? The NCUA has the answer to this question in its Share Insurance FAQ:

What happens when federally insured credit unions merge?

If a member has accounts in credit union A and credit union B, and credit union A merges into credit union B, accounts of credit union A continue to be insured separately from the share deposits of credit union B for six months after the date of the merger or, in the case of a share certificate, the earliest maturity date after the six-month period. In the case of a share certificate that matures within the six-month grace period that is renewed at the same dollar amount, either with or without accrued dividends having been added to the principal amount, and for the same term as the original share certificate, the separate insurance applies to the renewed share certificate until the first maturity date after the six-month period. A share certificate that matures within the six-month grace period that is renewed on any other basis, or that is not renewed, is separately insured only until the end of the six-month grace period.

If the merger results in CDs that exceed the NCUA limits, the NCUA will continue to insure the CDs until they mature. When they mature, you’ll then have to worry about moving money or adding beneficiaries to ensure all of your deposits remain under the NCUA limit.

Merger Considerations

If the merger goes through, Valor members will no longer have to worry about the financial health of Valor Credit Union. PenFed is currently the third largest credit union the nation with a history of financial strength. We have it listed with an overall financial health grade of an “A” based on 2016 Q3 call reports. Also, I think PenFed management is more deserving of trust than Valor’s management based on Valor’s actions to members with Prime Rate Certificates.

Several DA readers have contacted Valor’s CEO and have received other information about the merger and the Prime Rate Certificates. Comments in this DA forum thread and in this one should be helpful to review. If you have any more information or questions, please leave a comment under this blog post.


Comments
mc
mc   |     |   Comment #1
Thank you so much, Ken. You are an invaluable resource to the banking community. It's good to know that our investments will continue as they were. Valor and PenFed could have provided us this same information but they chose not to. This is why we need people of good will like you out there on the wall watching out for the rest of us.
dave9354
dave9354   |     |   Comment #2
Thanks Ken! I was just about to post the article about NCUA deposit insurance and you beat me to the punch. Good to know we will be safe!
APF
APF   |     |   Comment #3
I have a cd with Pen Fed. It matures in 2020. Will it continue to be insured?
Anon E. Moose
Anon E. Moose   |     |   Comment #5
Ken answered this in detail in his writeup, above.
jib2424
jib2424   |     |   Comment #4
Should we vote yes or no?
Mak
Mak   |     |   Comment #8
Definitely yes
anon
anon   |     |   Comment #17
Definitely NO.
Matt
Matt   |     |   Comment #56
It does not matter, the vote is just formality and has no influence of the outcome, the Valor needs to merge or be closed by NCUA.
Mak
Mak   |     |   Comment #6
I'm glad I put more money in Valor a couple months ago when they said I could, if I would have known PenFed was going to take them over I would have put even more in.
Matt
Matt   |     |   Comment #58
The Valor CD rates will not be honored by Penfed. You will be given choice, accept Penfed rates or close the account.
IRA
IRA   |     |   Comment #69
You are incorrect!
hank
hank   |     |   Comment #7
yes, this is really good news. I was worried about the stability of valor. I am not worried about penfed. Does this mean they are going to allow further add ons???
hank
hank   |     |   Comment #9
I mean since they are honoring the original terms and that's part of the original terms
NotLikely
NotLikely   |     |   Comment #10
Don't count on it. You are lucky enough you get to keep just the rate.
Francis1
Francis1   |     |   Comment #11
Thanks for clarifying this proposed merger. Maybe I'm overthinking this but I see some conflicting info in the article. In FAQ # 16 it states, "Yes. All fixed-rate loans and CDs will transfer to PenFed at the existing Valor rate and term." The key words here are "will transfer". That will be when the merger takes effect, March 1st 2017. However, here is where the problem is, "Then, on April 1, the merger process will be completed with existing Valor accounts and products converted over to PenFed accounts and products that are most similar." So, even tho the 3% rate is transferred to Penfed on March 1st, can they change it on April 1st? Doesn't it seem like the CD will be changed to a PenFed product on April 1st? Please tell me they are not playing word games like the CD will be transferred at 3% but not maintained at that rate.
Bozo
Bozo   |     |   Comment #16
Francis1, I noted the same ambiguity, and, no, you are not overthinking anything. Once Valor members have approved the merger, the term sheet between Valor and PenFed governs. Has it been published? If not, good luck getting it before the vote. That said, if the rate on the seven changes once transferred to PenFed, you might (theoretically) have the option to terminate with no penalty. You might inquire of Valor for clarification of this ambiguity.
alan1
alan1   |     |   Comment #37
Please see Comment #36 for Valor CEO's response re this issue
Greg
Greg   |     |   Comment #12
Excellent, timely, accurate information. Pretty much a day at the office for Ken and this blog.

Many thanks for doing what you do, Ken. We are all hugely indebted to you for saving us vast amounts of time and money.
Greg
Greg   |     |   Comment #13
Is there any more information on Valor's apparent communication to some Prime Rate holders that the 3% would be reduced to .25%?

For example, how was that information conveyed? Was it in response to an inquiry, or voluntarily offered by Valor? Was it in writing or oral? Was it some overburdened, underpaid telephone rep or someone who presumably knew what they were talking about?

I'm not going to bother to dig it up right now, but the terms of the CD could not have been clearer: the base was 3%, period. Nobody in their right mind would have locked up funds for seven years, with a two-year early withdrawal penalty, if Valor had the right to unilaterally reduce the rate of to .25%.

It would be helpful if anyone who got this information could provide some additional illumination.
lou
lou   |     |   Comment #26
Some Valor Prime Rate CD holders bought their CDs prior to 2014 (before they become widely known to the public), and some of those CDs did not include the "3% floor" language. It was a typographical error, because at the time Valor had every intention of honoring the 3% rate. PearlBrown, who use to participate in these forums, was one of the people victimized by this unfortunate act.

I believe Valor after dealing with the many complaints of members, who contested the elimination of the add-on feature, punted the mess to their attorneys, who decided to interpret everything related to these prime rate certificates in a hyper-legalistic fashion. I bought my CDs prior to 2014, and some of them don't include the "add-on feature" language, even though they continued to allow it until they shut it down last year. On the plus side, all these pre-2014 CDs have a one-year EWP instead of the 2 years for the 2014 and 2015 CDs.

I am going to vote in favor of the PenFed merger. Assuming they honor the 3% rate (so far there is nothing which would lead me to conclude otherwise), there is no reason to oppose it. NCUA insurance will remain unaffected, and we are now assured the rates will continue until the maturity date. I have been a PenFed member and CD owner for over 10 years, and I have had no complaints. Even when they changed their EWP terms prospectively, they grandfathered all existing CDs. Also, I'm not aware of any voluntary merger where CD interest rates were unilaterally changed. If one exists, I would like to know who it is.
anongggg
anongggg   |     |   Comment #14
I'm voting **NO** on the merger, for many reasons. (1) Valor has shown itself not to be trustworthy. Rather, the exact opposite. They've shown themselves to be deceitful. Their unofficial FAQ on their webpage has no legit merit and is not binding in the least. For those who don't believe this, consider that Valor has ALREADY altered the terms of a signed, locked contract to their liking only (for which many of us had to fight through the NCUA just to get them to reinstate the terms temporarily). If that isn't bad enough, there's nothing from PenFed's side stating they will keep the current terms. Valor can say anything they want, but once PenFed takes over, they're in their legal right to make the Prime Rate CDs 0.0001% -- and as there would be no more "Valor" anymore, we'd all be without recourse. Conflicting statements from those are Valor about this only add to the reality that this is nothing more than hot air. (2) Even if PenFed WERE to keep the same rate (which to me is highly dubious), you can be sure of two other things: they would NOT reinstitute the original REAL terms of the contract (ie, allowing Add-Ons) -- but they WOULD -- WITHOUT A DOUBT -- reinstitute the SEVERE EWP (that Valor is currently "waiving" in return for altering the terms of the locked CD). (3) It seems the most important thing that Valor's board was concerned with, were themselves, and the 3-year employment guarantee they got -- REWARDING the VERY PEOPLE who treated their members -- and SIGNED CONTRACTS -- like dirt, by illegally changing the terms of fixed time deposit product. They're doing this for THEMSELVES, not their members. That much should be plain as day. (4) The gimmicks to try to entice members to vote yes. Like the extra 1% -- only on your share savings account (NOT CDs) -- which of course, most people don't keep money in. People either put money in their checking account to use day-to-day, or into a time-deposit account like a CD. Valor knows this, so the reality is, the bonus will amount to pretty much nothing. $50 million times zero... is still zero. On other other hand, a NO vote leaves a few options on the table: (1) Valor will have to look for another suitor... (2) Valor will manage to make it alone... or (3) Valor won't survive, and at some point the NCUA will give everyone their money. Personally, I think this is a better bet, because it lets a lot more time pass while Valor honors their 3% rate, with presumably the EWP still removed (since they want people to take back their 3% money). Either they will find another (better) match in time (better for us), they will stick it out on their own (better for us), or worse case scenario, they have to fold, and the NCUA gives everyone back their money (same, I believe, as if PenFed were to take over, for I have no reason to believe Valor's non-binding statement that the current rates will be honored). Plus -- though I would never put this above our (the members') self-interest, it's still worth thinking about -- I don't want to see the people that treated us (and signed contracts) like dirt REWARDED for their deeds. If PenFed has to go under, they have to go under. They need to reap what they sow. You don't like reading about the heads of the large banks getting bonuses for crashing their own institutions, well, if you vote yes, it's the same thing on a credit union scale. We'd all still get our money back from the NCUA. If I thought the merger with PenFed was better for us, I'd angrily let it slide, but honestly... with everything Valor has done, I think it's better for us to vote NO. I already have sent in my ballot, and voted NO.
anongggg
anongggg   |     |   Comment #15
Sorry for the typo, I obviously meant "If VALOR has to go under.." (not PenFed). I voted NO. Please read my above post for the reasons why.
Bozo
Bozo   |     |   Comment #18
anongggg, be careful for what you wish. Valor is going under, that much is certain. If the merger is not approved, and the NCUA "takes it over", (a) you get your money back, with accrued interest to the date of failure, or (b) you get whatever terms the NCUA can negotiate with a suitor (most likely PenFed), which might, or might not, be worse than the term sheet (which I have not seen).
Sylvia
Sylvia   |     |   Comment #21
Bozo, there’s another party with more to lose than us members: Valor employees. As evidenced by the current deal which is heavily skewed towards their interests, you can be sure they will be working hard to find another suitor should this fall through, less for our benefit than theirs. While I don’t begrudge them job security, offering members 1% on share account balances while employees get 10% retention bonuses and multi-year employment guarantees shows their priorities. I'd like to think my vote is worth more than 5 cents, which is the value of 1% on $5, my share account balance.
Chris59
Chris59   |     |   Comment #22
What makes you so certain that Valor is going under ? I believe that is what management wants you to think so that members will be scared into voting to approve this merger. If you look at their financial performance report on NCUA's website the loss for this year is the result of $2+ million being put into anowance for loan loss account. Without that one time write off, the credit union would have made a profit for the year. In fact if the credit union hired an actual CEO instead of paying an outrageous amount for a consultant plus weekly travel expenses back and forth to her home in the mid west then this credit union would be profitable and could most likely recover from the mess. This is not the first credit union in our are to find themselves in financial distress and yet they were able to recover with proper management.
Anon
Anon   |     |   Comment #39
I can guarantee you they are paying weekly travel expenses for their Interim CEO. First class flights by the way.
anonggg
anonggg   |     |   Comment #41
That's abtolutely NOT true. Your post makes it sound like if Valor goes under, people could lose money if another suitor takes over. And it's NOT true. If Valor goes under without another suitor, everyone's funds are NCUA INSURED (to $250,000 MINIMUM, more if it's structured right with beneficiaries) and people get back every penny. If another suitor (other than PenFed) wants to take them over, if there are ANY changes in terms in the takeover that you don't like, you can get EVERY PENNY back without penalty. The terms could be worse or better than PenFed, but in the meantime, the 3% is honored without the EWP, I don't trust or believe what PenFed says, and it's obvious they are pushing this through for them (the Valor Employees) to get not only their 3-year employment guarantee, but their 10% BONUS (wow. Destroy an institution, get a 10% bonus. While ****ing the members).
anonggg
anonggg   |     |   Comment #42
PS: IMPORTANT! ... If anyone's concerned about losing their 3%, by voting NO, think about it, you should vote NO. In effect that would keep things as they are (3%, NO EWP). Then if you want, people can take out the money at Valor and put it at Andrews, where it's paying 3% with only a 6-month EWP, instead a 2-year EWP that would be re-imposed if PenFed takes over. People may have grudgingly accepted a 2-year EWP with Valor when they opened it up, but ONLY because this was a special CD that allowed Add-Ons. Valor illegally took that away, so if you vote yes and PenFed goes through, people will be stuck with a NO-ADD ON CD WITH A SEVERE EWP as a BEST CASE SCENARIO. This is being rushed through for a reason, and its members are not the reason. It's for the benefit of the Valor employees that crashed their own institution, and they will be REWARDED for doing it. Not only a 3-year employment guarantee.. but a 10% BONUS?! While ****ing the members from what we signed up for. To me, the best scenario is to vote NO. That way, it keeps (for now) 3% WITHOUT an EWP. And if people want, they can move their funds over to Andrews where it's 3% with only a 6-month EWP. By it going to PenFed, even IF they keep the 3%, you've lost the Add-On, but then get a severe 2-year EWP, and reward those that ****ed us with a 10% bonus. No thank you, voting NO.
lou
lou   |     |   Comment #45
How do you know the Andrews 3% CD will be available if Valor should go under? The availability of the Andrews 3% CD could end tomorrow. If we lose the 3% rate because of a liquidation or supervised merger of Valor, there is no guarantee a 3% CD will be available anywhere else in the marketplace. Also, the voluntary waiver of the EWP by Valor could be terminated tomorrow as well. You are making a lot of assumptions that requires telepathic powers, as if you know what is going to happen in the future. Instead of voting no, why don't you just liquidate your Valor CDs now and transfer your money to Andrews. Wouldn't that be better than risk losing the 3% rate if Valor should go under or it unilaterally reinstates the EWP?
Ann
Ann   |     |   Comment #28
"Like the extra 1% -- only on your share savings account (NOT CDs) -- which of course, most people don't keep money in. People either put money in their checking account to use day-to-day, or into a time-deposit account like a CD." For people reading this blog, sure, but I suspect the general public isn't nearly as 'into' CDs. In part because they have so little saved at all - about a third have no savings, and another third have less than a thousand dollars in savings - and I doubt that's because they've all been buying CDs and omitting those funds from their answers to this survey https://www.gobankingrates.com/personal-finance/data-americans-savings/ instead of leaving the money in a literal 'savings account'. ;-)
!!!
!!!   |     |   Comment #34
Just proves it's impossible to please everybody even when something is in their own best interest. They didn't have to offer that extra 1% on share savings accounts either.
alan1
alan1   |     |   Comment #19
As Ken noted, "Valor appears to be rushing this through." The "Ballot for Merger Proposal" states: "This ballot must be mailed to the address below ... to be counted. Please use the postage paid return envelope provided." The Ballot then provides the address you "must" mail it to. The enclosed postage paid return envelope has a different address.
Bozo
Bozo   |     |   Comment #20
Too funny.
NotLikely
NotLikely   |     |   Comment #23
Back in 2014 , I tried to warn against this offer. It just seemed to be too good to be true: "Hope everything works well, but have you ever wondered why Toby would stretch out on this when they could get investors just as eager to go for a standard 7 year 3.04% cd without any obligations for the add on feature that would go south on them if interest rates go lower? Also, they pay more if the prime rate goes over 6.29% (However this is not likely to happen in the 7 year term) Something is not adding up on this so that is why I am a little hesitant to jump at it. What is in this deal for Toby? Is there small writing in the disclosure that maybe they can lower the minimum rate later? If what poster no. 9 says is true about the CFO, that would be even more reason to maybe stay away. Anyway, good luck and I hope it works out. It is NCUA insured, so no principal should be lost in the deal." Anyway, I am hoping PENFED honors the rate and the accumulated interest after the transition, but that is yet to be seen.
h_meister
h_meister   |     |   Comment #27
Interesting perspective in terms of warning against to good to be true. I took out the CD in 2014 and I'm quite happy to be earning 3.00% for past 2 1/2 years and I'm fine with earning it for next 4 1/2. I have 100K maximum version and was able to add on to maximum (with interest accumulating) before restrictions were put in place, Would I have preferred Valor to be more ethical and professional? Definitely. Will this credit union members be better off being acquired by Pen Fed? IMHO, Yes. I agree with Lou's assessment that Pen Fed will honor the rate aspects of the 7 year CD. A CD is a contract, especially since Valor required my signature and Pen Fed assumes these contracts in making this merger / acquisition. This is the seventh merger Pen Fed has done in the last 18 months and I've seen no merger complaints from the other acquired CU members. It's clear Pen Fed wants to grow via merger and I they will not want to run afoul of their regulator by unilaterally modifying CD rates. Someone above mentioned an April 1st movement to Pen Fed accounts. This is a normal process in a bank / Credit Union acquisition. Pen Fed wants all their business on common platforms. Pen Fed's speed to convert is quick but they've have probably become very proficient doing other recent mergers.
h_meister
h_meister   |     |   Comment #29
Tough crowd. Both addressed to Lilie & CO in Sunbury, OH 43074. One to a street address, one to a PO Box. I think document will get to right party if you mail to either address.
Ricochet
Ricochet   |     |   Comment #24
PLEASE Vote NO.

I don't want to see PenFed getting ( enter your own expletive )
Mak
Mak   |     |   Comment #25
I'm sure penfed knows what they are doing.
!!!
!!!   |     |   Comment #35
I sure hope so. PenFed is my main credit union. But if they do merge, it will be nice to have a brick and mortar office within 40 miles of me rather than hundreds. Although I have never had a need to visit a PenFed office in all the years I have been with them.
Cat Chance
Cat Chance   |     |   Comment #31
No wonder why PenFed can't offer top of the line CD rates anymore... if we keep letting garbage like Valor in. Where is my PenFed voting ballot to keep them out?
A
A   |     |   Comment #33
As my CDs mature at Penfed I've been finding better rates at other institutions. I have one coming due in April and I'll see what rates look like then. Probably will find a better rate elsewhere.
ATT
ATT   |     |   Comment #40
I wonder how many high rate CD holders Penfed will be inheriting for Valor. They also have some questionable loans. The credit union had $19,887,525 of participation loans on its books and $38.7 million of indirect loans — those made by other lenders, but now in Valor’s portfolio.
Mr. Leggett said a financial institution may take those steps if they have money and not much loan demand. Other credit unions selling loans or part of loans may want to distribute their risk or rebalance their loan portfolio.
“The NCUA requires that these loans meet the credit union’s own underwriting standards,” he said. “What unfortunately happens often is that once you get them in house, they don’t live up to the standards.”
JohnK
JohnK   |     |   Comment #32
The Prime Rate CD is not a fixed rate product. It is a variable rate CD. It is notable that the "Answer" above specifically states Valor fixed-rate loans and CD terms will remain the same.
Anonymous1
Anonymous1   |     |   Comment #52
Fixed-rate modifies the word "loans" not the word CDs.
alan1
alan1   |     |   Comment #36
I have received an e-mail response from Valor's CEO re a number of issues that have appeared on this thread. As to the issue discussed by Francis1 (#11) and Bozo (#16) re conversion of Valor accounts to "similar Fed accounts", she wrote:


"The merger details, such as all CD and loan terms remaining intact with conversion to PenFed, was approved by the NCUA prior to the upcoming member vote and would not allow contract changes (loan and CD agreements/contracts) in the conversion. What the FAQ in referring to is checking and savings accounts (without contracts). For example, we have Kasasa (cash back) checking, but PenFed does not, so when Valor member Kasasa checking accounts transfer to PenFed, they will give members the closest product to the Kasasa products as possible. PenFed has no interest in alienating members, lawsuits, or CFBP or NCUA violations. They’re proposing the merger because they want to incorporate Valor members into PenFed."

As to my comment (#19) re inconsistency between ballot instructions and the reply envelope, she wrote:

"I apologize for the confusion, that was my error. When the accounting firm sent me their postage-paid sample, it was the last item needed before printing and I did not compare the two. Votes will be counted whether members use the physical address or PO Box of the accounting firm."

I also wrote to her about zero e-mail communication from Valor on the merger, not even a link to the website material, and mentioned that Valor could have easily posted the combined financial statement (which was included with the ballot) on its website.

She replied: "We did not choose not to publish the combined financials on the website, but thank you for the suggestion. We will publish the combined financials on the website today as well as an all-member email to notify members of the upcoming vote and link to FAQs."
hank
hank   |     |   Comment #38
I hope everyone votes for. If this goes through, the only one left to worry about is melrose
anonggg
anonggg   |     |   Comment #43
Thanks for those who tried to get some clarification... but as I wrote in an earlier reply a while back, I'm still VOTING NO. .. .. HERE'S WHY: If anyone's concerned about losing their 3%, by voting NO... think about it, you should vote NO. In effect that would keep things as they are (3%, NO EWP). Then if you want, people can take out the money at Valor and put it at Andrews, where it's paying 3% with only a 6-month EWP, instead a 2-year EWP that would be re-imposed if PenFed takes over. People may have grudgingly accepted a 2-year EWP with Valor when they opened it up, but ONLY because this was a special CD that allowed Add-Ons. Valor illegally took that away, so if you vote yes and PenFed goes through, people will be stuck with a NO-ADD ON CD WITH A SEVERE EWP as a BEST CASE SCENARIO. This is being rushed through for a reason, and its members are not the reason. It's for the benefit of the Valor employees that crashed their own institution, and they will be REWARDED for doing it. Not only a 3-year employment guarantee.. but a 10% BONUS?! While ****ing the members from what we signed up for. To me, the best scenario is to vote NO. That way, it keeps (for now) 3% WITHOUT an EWP. And if people want, they can move their funds over to Andrews where it's 3% with only a 6-month EWP. By it going to PenFed, even IF they keep the 3%, you've lost the Add-On, but then get a severe 2-year EWP, and reward those that ****ed us with a 10% bonus. No thank you, voting NO.
anonggg
anonggg   |     |   Comment #44
And remember, if you vote NO against PenFed, it will keep in place what it is now: 3% WITHOUT an EWP... .. If Valor looks for another suitor, it keeps the best possible terms for us in place while that happens. If Valor has to go it alone, it keeps the best possible terms for us. If Valor goes under, every penny will be insured by the NCUA (up to $250k min, more if structured right with beneficiaries) and people can move it elsewhere (like Andrews) where it's paying 3%. This isn't just about not rewarding those who ****ed us with bonuses and guarantees. It's about what's in our interest. If PenFed could guarantee us in writing they will either waive the EWP or allow AddOns, I'd grudgingly vote yes for it, but they WILL NOT because PenFed will NOT allow Add-Ons but REINSTATE the severe EWP. Again, there are other places (like Andrews) paying 3% with only a 6-month EWP. I think it's in our (the SAVERS and MEMBERS -- NOT the Board Members) best interest to vote NO.
lou
lou   |     |   Comment #47
See my comment to an earlier post made by anonggg. This guy is making a number of assumptions he can't possibly know in advance. He has no idea if the Andrews 3% CD will continue to be available if and when Valor goes under. He also has no idea if Valor will continue to waive the EWP on the future.
Ricochet
Ricochet   |     |   Comment #46
So ChasR just posts PenFed Rate reduction on CDs in the forum

Paying for those 3% ers from Valor even if rates sometimes change at beginning of month, we are seeing rates increase elsewhere.
A
A   |     |   Comment #48
So Penfed inherits CDs with high rates and loans that look questionable and ****s it's current members by lowering rates. Someone said they must know what their doing by taking over Valor. Dosen't look like it to me as a member of Penfed. No benefit to current Penfed members.
gregk
gregk   |     |   Comment #49
The dollar values of Valor CD's and loans (potentially) being taken over by PenFed are a drop in the bucket relative to Penfed's total business, and certain not to be impacting PenFed's current CD rates (the deal hasn't even been approved yet).
A
A   |     |   Comment #50
It doesn't make any sense for them to take over an institution that has lost more than 2 million dollars in both the second and third quarters of last year. I know that the takeover of Valor isn't causing a direct impact on their product offerings but as a member I'm not liking what I'm seeing. If their rates aren't competitive my money is going elsewhere. They are no longer a rate leader like they used to be.
NotLikely
NotLikely   |     |   Comment #51
You got that right. So I suppose a lot of old time members of PENFED will be voting with their feet on this and going with another credit union. They can reduce the rates to help pay for the TobyTakeover but I think the staying trend for me with PENFED is on a downward spiral.
ATT
ATT   |     |   Comment #53
As a member of Penfed I'm also upset that they are paying a 1% bonus for share accounts, retention bonus of 10%, for employees, 3% raises for 3 years, job guarantees and donating $500,000 to local charities for an institution that is losing money? Where is the board of directors of Penfed? What is the CEO thinking? Please tell us your justifications? I know that Valor is a small CU but what is Penfed doing?
!!!
!!!   |     |   Comment #65
Well, if enough "old time members of PenFed" vote with their feet, then PenFed may raise their CD rates for us that remain to build their cash reserves. I hope their are enough who think like you #51 and "vote with their feet", but I rather doubt it.
NotLikely
NotLikely   |     |   Comment #84
For those of you new to PENFED and just in case the terms of this takeover is undesirable, it might be of some help to know up front the limits on Penfed's ACH transfers. Ken has details on this: https://www.depositaccounts.com/blog/2012/06/penfeds-new-ach-online-transfer-service.html
ATT
ATT   |     |   Comment #54
If I get a chance to vote for the BOD of Penfed I'd vote the incumbents down but I doubt it would make a difference.
Matt
Matt   |     |   Comment #55
Valor wants to negate the 3% CD by merging and Penfed does not have to honor those CD. The contract was with Valor, Penfed just need to close those CD without any consequences to anyone. In the papers (documents) of the merger is indicated that the Penfed current rates will be applied to Valor customers or they may be closed without penalties to the customers.
alan1
alan1   |     |   Comment #57
Please specify the documents purportedly demonstrating that CDs may be "negated" and that purportedly "indicated that the Penfed current rates will be applied to Valor customers or they may be closed without penalties to the customers." Titles of the documents, links, and quotations would be helpful.


Unsourced assertions are not helpful.
Matt
Matt   |     |   Comment #59
#57, from the valor web site:
".............What happens when federally insured credit unions merge?
If a member has accounts in credit union A and credit union B, and credit union A merges into credit union B, accounts of credit union A continue to be insured separately from the share deposits of credit union B for six months after the date of the merger or, in the case of a share certificate, the earliest maturity date after the six-month period. In the case of a share certificate that matures within the six-month grace period that is renewed at the same dollar amount, either with or without accrued dividends having been added to the principal amount, and for the same term as the original share certificate, the separate insurance applies to the renewed share certificate until the first maturity date after the six-month period. A share certificate that matures within the six-month grace period that is renewed on any other basis, or that is not renewed, is separately insured only until the end of the six-month grace period.

Will my account stay the same?
All Valor Credit Union accounts will be mapped to equivalent PenFed accounts.........................."
AAAAA
AAAAA   |     |   Comment #67
What you quote deals with rules pertaining to NCUA insurance only. Nothing in here stating going forward credit union (Pen Fed) has right to "negate" or otherwise change CD rate.
Unreal
Unreal   |     |   Comment #68
Sooooooooo, #67, you are in effect saying, that you want to continue your CD with the existing rate KNOWING that after 6 months you will not have NCUA insurance! That is what I read from your comment and the quote in #59
AAAAA
AAAAA   |     |   Comment #70
Everything you referenced in #59 is in reference to NCUA insurance limits. The six month period grace period is applicable if you stack the balances from same titled accounts in two credit unions (e.g. John Smith) and the combined balances exceed $250K. The key word in #59 is separate, this means if your account matures with six months of merger you have separate insurance coverage of 250K. If maturity is beyond six months you have separate insurance up to date CD matures. You can see this info in FAQ at https://www.mycreditunion.gov/estimator/Pages/content/fdic_info.html#20
Matt
Matt   |     |   Comment #77
#67, you did not read this on Valor's web site, that is why you do not believe:
"Will my account stay the same?
All Valor Credit Union accounts will be mapped to equivalent PenFed accounts"

Please tell me why Velor did not answer with simple YES, that's right, mapped means paired with similar CD not an exact transfer CD as per current rates and lengths at Valor.
AAAAA
AAAAA   |     |   Comment #81
Matt, the language "all Valor Credit Union accounts will be mapped to equivalent PenFed accounts" is intended for Valor's 20K+ members. The intent is if there are variations in products such as checking / savings, the customer will get the most equivalent PenFed product. PenFed wants to offer a consistent product on their sales / operational platforms to their entire customer base. There is no contract on these products and Valor customers can easily close these accounts. On a unit basis, checking / savings accounts normally up 80 - 90% of deposit accounts at a bank / credit union and this is what PenFed is focusing on when they convert in April (assuming members vote for merger). At same time, contract products will transfer and Penfed will put them on their systems but will retain the features of the current product. If Valor offers a 3 year ARM mortgage and PenFed didn't, PenFed will need to honor the terms of the 3 year term and certainly not change the rate. Same thing goes on a 7 year add on CD. I think you're taking the language in FAQ #5 way to literally. Just out of curiosity, do you have a 7 year add on with Valor and what balances do you have on it? As an FYI, I work for a bank and been involved in varying degrees on 20+ acquisitions over the past 15 years. If a bank pulled the stunt you're suggesting, regulators would be on be on us like a load of cow manure!
GEK
GEK   |     |   Comment #63
No such papers. Valors CD contracts are with their clients and can not be circumvented by a separate contract involving a merger with Penfed..This is a merger, not a takeover.
sukie55
sukie55   |     |   Comment #60
As a member of both Valor and PenFed, I voted NO.
GEK
GEK   |     |   Comment #61
look....I think a lot of these posts are unsubstantiated. I received a letter a swell as a ballot from Valor and had concerns about my P.R.Certificate. I emailed the CEO as follows: Me: Regarding the proposed Valor/PenFed merger. Am I guaranteed that PenFed will honor the terms of my Tobyhanna/Valor Prime Share Certificate that I opened on (06/24/2014) including honoring the 3.00% certificate floor rate. Thank you, G***** K***** CEO: PenFed will honor all loan and CD agreements and the accounts will transfer to PenFed intact. Please take a look at the FAQ, put together by PenFed, on the Valorcu.org website for more information. Any other questions, please email or call any time. Chris Dawe CEO
ATT
ATT   |     |   Comment #64
She or he must be happy with this deal getting retention pay, job guarantees for 3 years and a 3% annual rasie. All for a money losing institution. Maybe Penfed should hire this person.
Berry
Berry   |     |   Comment #99
#64, You missed the best part, all of the employees and CEO and the management get 10% bonus too.
!!!
!!!   |     |   Comment #66
GEK, good to see someone looks at this potential merger rationally rather than emotionally.
Matt
Matt   |     |   Comment #71
You are being played my friends, CD agreements do not contain a rate guaranty and there you have it, the length of the term is guaranty but not the rates.
alan1
alan1   |     |   Comment #72
#71 -- Please provide a source for this remarkable statement: "CD agreements do not contain a rate guaranty and there you have it, the length of the term is guaranty but not the rates."
Real
Real   |     |   Comment #73
If an agent, notwithstanding the "boilerplate" represents (and it is fully documented! You do need proof!) the rate is good for...then other misrepresentations amount to fraud...hopefully one doesn't have to go that far...but then again neither should the agent! See Islandriver case, Cal Supreme Ct case in 2013 for applicability.
GEK
GEK   |     |   Comment #75
Matt, I don't know where you get your information. A CDs interest rate whether fixed or in the case of the P.R. Certificate, a rate range which is part of the agreement containing a floor and ceiling. This is part of the contract between issuer and client and must be adhered to.
Ricochet
Ricochet   |     |   Comment #74
In the end we are but a speck of either credit union.
There won't be any mass exodus of Pen Fed or rousing cheers from Valor.
 It's like everybody gets a trophy at a PeeWee baseball game.
Ladder on members !
Matt
Matt   |     |   Comment #76
Let me make this clear, the Valor web site states the following:

"Will my account stay the same?
All Valor Credit Union accounts will be mapped to equivalent PenFed accounts"

There you have it, mapped means same length of time and rates as are present at Penfed for that particular CD,
but the rates from Valor will NOT transfer to Penfed.

This was confirmed to a friend of my who spoke with Valor's manager.
GEK
GEK   |     |   Comment #78
In reply to Matts post #76 My email to Valor CEO: Am I guaranteed that PenFed will honor the terms of my Tobyhanna/Valor Prime Share Certificate that I opened on (06/24/2014) including honoring the 3.00% certificate floor rate. Thank you, G***** K***** Reply from Valor CEO: Mr. K*****, PenFed will honor all loan and CD agreements and the accounts will transfer to PenFed intact. Any other questions, please email or call any time. Chris Dawe CEO Intact means not damaged or impaired in any way; complete.
Matt
Matt   |     |   Comment #83
Valor can say or promise anything, they want this merger ASAP before they are closed by NCUA. If people withdraw their money before the merger, Valor must close the doors. Now ask Penfed if they are obliged to keep the same rates as Valor indicated. I bet you will get different answer. Penfed can grandfather Valor accounts as they are and (get in trouble with NCUA) or they can re-issue them under Penfed new terms. Valor can not guaranty anything, they are desperate to get rid off these CDs, a beggar can not be a chooser. NSUA letter to Valor indicate they are in violation of NCUA guidelines for the interest rates.
GEK
GEK   |     |   Comment #85
There is no doubt that Valor is overshadowed by the former CEO embezzling $700K, as well as bad business decisions, loans, loses. Both Valor and PennFed have a fiduciary responsibility to its members. PennFed by initiating the merger and being the primary (controlling) partner in the merger where both C.U.s become PennFed. Therefore PennFed accepts Valors fiduciary responsibility as it's own if the merger is completed. PennFed as well as NCUA is overseeing Valors actions involving this proposed merger. I seriously doubt that Valor or PennFed are going to risk potential lawsuits by fraudulently lying to its members about Valors P.R. CDs. If the terms of the CDs are changed you have the rite to close out the CD without penalty under NCUA rules. PenFed wants a merger, not a scandal! Valor is a $227M C.U....PenFed is a $20.6B C.U. I am sure Penn Fed is picking up Valor at a fire sale price making the P.R. CD commitment a non issue.
Greg
Greg   |     |   Comment #80
Matt,

You're reading the wrong FAQ. No. 17 says:

"Will PenFed honor my Valor Credit Union loan and CD rates and terms?

"Yes. All fixed-rate loans and CDs will transfer to PenFed at the existing Valor rate and term."

This language could not be more unequivocal. And you can bet your bottom dollar that Valor would not put out any information about the acquiring entity, PenFed, without he language being thoroughly vetted by PenFed's attorneys. That's just standard operating procedure in a corporate deal.

I wouldn't lose sleep over this.
anon32
anon32   |     |   Comment #79
For all those who have spoke to Valor about this.. did ANY of you ask one simple question: will PenFed honor the ORIGINAL TERMS of the CD that we all have on signed pieces of paper (ie, allow Add-Ons?) or no? Valor changed the terms (I believe illegally) in the middle because they were worried about being solvent. PenFed won't have a problem with that (they're so big) but I can bet you the farm that PenFed will not honor the original terms of the CDs that we all agreed to. If you have a contact at Valor you've spoken to (or someone at PenFed), please call them back and ask them this question and post their replies. I'm sure there will be no positive replies here to this question... Thanks!
GEK
GEK   |     |   Comment #82
I believe the point is moot since they legally changed the add-on clause by later allowing a 30-day add-on to existing P.R. CDs to satisfy the NCUA complaints against Valor for not giving a 30 day notice in the first place. I don't believe they are legally obligated to reinstate the add-on feature. You will be no worse off then you are now either way as far as the add-on issue goes..
James Barnes
James Barnes   |     |   Comment #86
Today is the final day to decide. Should we vote yes or no, and why?
Berry
Berry   |     |   Comment #87
I already voted NO.
Greg
Greg   |     |   Comment #89
Your call on how to vote (obviously), but I voted "yes." We have iron-clad confirmation that PenFed will honor the rate and term of the Valor 3% Prime CD and that the transferred CD will be separately insured for NCUA purposes (an issue if you have large CDs at both institutions).

The only uncertainty is whether PenFed will honor the original "add-on" terms to the Valor CD. My guess is they won't. But then, neither would Valor, if the merger is rejected.

More importantly, if the merger does not go through, then Valor must either seek another partner – possibly a weaker one – or be liquidated. If it's liquidated, the NCUA just gives you your money back – and goodbye 3%.

Yes, Andrews currently has a 3% deal. But it could be withdrawn in a flash. Then, good luck finding a comparable rate.
anonymous
anonymous   |     |   Comment #98
Vote how you want, I voted No as well.
GEK
GEK   |     |   Comment #90
My take on it is Valor had a $4.6Min loss in the last 2 quarters of 2016 and is on a fast track to insolvency and failure. I have been expecting the NCUA to seize accounts and hand the keys to another C.U. If that happens I can guarantee you that the terms on the P.R. CD will be changed and your recourse will be to accept the new terms (lower interest rate) or to cash out with no penalty. If the merger goes through, all investigation leads me to believe that the %3 interest rate will remain intact from Valor CEOs own mouth. If I'm wrong and they change the terms of the P.R. CD, then by NCUA rules you will still have the option of redeeming the CD without penalty. I'm voting yes because I'm convinced that if the merger doesn't go through Valor will fail in 2017.
James Barnes
James Barnes   |     |   Comment #91
Has anyone found out if the add-on provision will remain when the merger with Pen Fed takes place?
alan1
alan1   |     |   Comment #92
The add-on provision cannot remain -- it was terminated. I don't know if it will be reinstated by PenFed. I wouldn't count on it.
!!!
!!!   |     |   Comment #93
If the add-on provision was terminated before the merger, why would PenFed want to reinstate it? Most everyone here who is with Valor now argued that all existing terms of Valor's CDs at the time of the possible merger, should remain in effect after the merger. So...........it's "be careful what you wish for", you may get it but may not like it.
GEK
GEK   |     |   Comment #94
The add-on provision change was approved by NCUA after valor retroactively re-opened the Add-on provision for 30 days and satisfied the NCUA provision to allow withdrawal of funds without penalty with any change in terms/conditions which is 30 days as well. So in essence it's fulfilled its obligation according to NCUA rules. They probably won't restore the add-on feature because they don't have to.
James Barnes
James Barnes   |     |   Comment #95
Will the "no EWP" provision remain once the merger goes through?
GEK
GEK   |     |   Comment #96
The EWP temporary suspension was actually put in place to satisfy the NCUA 30 day waiver of EWP rule that is required for changing the original terms (The suspension of the add -on feature). They most likely will reinstate the EWP.
GEK
GEK   |     |   Comment #97
Whenever they change the original terms of a CD agreement/contract they have broken the agreement and must allow the CD holder to withdraw any or all funds without penalty according to NCUA rules.
Berry
Berry   |     |   Comment #100
If the merger goes through, you will be locked with Penfed's new rules, get your money out or it will be re-issued under Penfed CD terms, once transfered, if you close the CDs, new EWP will apply and the rate will be cut to comply with NCUA guide lines.

Keep in mind NCUA works for the CUs and not the members, they do not want to pay insurance money and bail out the CUs, If NCUA rules are followed the customers always lose.
lou
lou   |     |   Comment #101
Since I don't want my comment to be deleted I will try to keep it civil, but some of the comments by the readers of this site are beyond belief. Are these the same people who believe the CIA blew up the WTC or JFK was killed by our govt? Valor has already in writing stated that Penfed will not cut the rate or change the existing terms of the CDs. I have been assured of this by the CEO of Valor. Regardless, you have posters who are letting their imaginations run wild and essentially cutting off their nose to spite their face. You can't legislate against stupidity.
anonian
anonian   |     |   Comment #102
Well let's see.. since Valor will cease to exist if PenFed takes them over, perhaps people would feel more comfortable if the "assurances" (that current rates would be honored) came from PenFed as well -- who alone will be calling the shots if such a merger were approved -- instead of only from Valor -- an institution that lied to its members, treated contracts like dirt, and has everything to gain with 10% bonuses for its employees if this merger goes through. Funny that the FAQ making all these promises was signed only by Valor's Chairman of the Board, and not co-signed by anyone at PenFed, which would normally be the case (merger announcement letters such as this are usually signed by the CEOs of both institutions). Personally I've been thru 2 different failures where the acquiring institution immediately lowered rates. I was allowed to take out the money penalty-free of course, but sorry, to me this doesn't pass the smell test. There are what-ifs and possibilities either way, but as someone with accounts at both PenFed and Valor (both under the NCUA limits), I felt No was the right choice. I already sent my reply back in the postage paid envelope and voted No.
h_meister
h_meister   |     |   Comment #103
Anonian, you mention in you post being through two "failures". Rules are different in a bank / credit union failure as takeover institution is taking on substantial risk with minimal opportunity for due diligence. In a merger/acquisition, acquirer has much greater ability to review the book of business in detail. Unilaterally changing contract rates will not go well with new customers and government regulators. My experience with a merger situation involved Wachovia 5.3% five year CDs. Wells Fargo acquired within six months and everything was fine on rates for full term. Realize this is FDIC, not NCUA but no doom and gloom on that one!
dave9354
dave9354   |     |   Comment #104
I agree Lou. Some people are just as dumb as ditch water.
Jerry
Jerry   |     |   Comment #105
lou #101, did you talk with Penfed, I guess not, therefore your name calling is as bad as the the people who had legitimate concern. If you can guaranty that everything will be the same as per Valor's CEO comments, why he did not stated that the CDs rates will remain intact and for the length of the original terms, but he said the CDs will be MAPPED with similar Penfed CDs. Can you comment on that?

"Will my account stay the same?
All Valor Credit Union accounts will be mapped to equivalent PenFed accounts"

MAPPED does not mean transfered, it means re-packaged with similar CDs.
???
???   |     |   Comment #106
there were 3% 5yr CD issued by PF that now mature in 2019. That would be on par with Valor. Penalties and ect. ????
jib2424
jib2424   |     |   Comment #107
Has anyone spoken to Pen Fed to see what they say about keeping the original terms of the CDs?
Jerry
Jerry   |     |   Comment #108
jib2424, I did try yesterday to speak with someone from the management at Penfed, they put me on hold for like 50 minutes and after that I was disconnected. I believe they will not comment on the merger, the documents are with their attorneys and they are waiting on the merger vote results.
We may know more on the 8th or after that day.
lou
lou   |     |   Comment #110
Jerry, you're misinterpreting the "mapped" statement. Others on this site have tried to explain it to you, but for some inexplicable reason you're deliberately unwillingly to grasp what should be a simple concept. I have a feeling no matter how many times it's explained to you, you're not going to be persuaded. I learned early on as a business owner not to waste time with people who refuse to be rational.
Don't know
Don't know   |     |   Comment #111
And, for us dumbies, what does mapped mean?
Hank2
Hank2   |     |   Comment #114
#110 Lou, I would disagree with you, as business owner (as you indicated), you should know better that the customer is always right.
Mapped does not means same or even transfer. It seams you are the one that do not want to accept the truth.

Secondly, why mapped and nor equal transfer. Why the word equivalent is thrown in, why not just tell the truth that the CDs will be changed according to Penfed rules.

I have CD with them and I'm waiting for EWP to be removed by Penfed when they take over, and close my CD. That 6 month insurance mambo jumbo thrown in by Valor is a huge giveaway that they will not honer the present rates.
Newbie1
Newbie1   |     |   Comment #118
Hank, judging from your spelling and English usage English is a second language for you. The use of the word "mapped" in the Valor FAQ in regards to accounts means that a share savings account at Valor will remain a share savings account at PenFed. Likewise a checking account at Valor will remain a checking account, and will be as similar as possible to the Valor account - a rewards checking at Valor for instance will not become a standard checking account at PenFed. In this context, regarding our CD's, they will remain CD's. PenFed has 3.75% 7 year CD's maturing this year which are unlikely to renew at those rates, PenFed will be able to honor the 3% rate of our Prime Rate CD's as they have pledged. Better Valor be acquired than fail in my opinion...
hank
hank   |     |   Comment #109
I agree with lou 101. There are usually a lot of smart and helpful posters on this site, but not apparently on this thread
!!!
!!!   |     |   Comment #112
It's comes with anonymity behind a computer, hank. You get a lot of knowledgeable and helpful people and a few of the opposite in every forum group, no matter what the topic is.
Hank2
Hank2   |     |   Comment #116
Hank, may I ask why you always agree with lou and what is your smart contribution to this blog/group?
Anon E. Moose
Anon E. Moose   |     |   Comment #113
For whatever it might be worth, I already have 3% CDs with PenFed. I'm confident many others here do as well. And the terms/penalties associated with my PenFed 3% CDs are less draconian than those on my Valor 3% CDs. Yes, I also have some of the Valor 3% CDs too. So I'm guessing the Valor 3% stuff is totally NO BIGEE to the PenFed potentates. It's nothing they have not seen before and, in fact, the Valor CDs are actually superior to their own, strictly from PenFed's standpoint. Cause when our Valor CDs move over, their terms and penalties will move over right along with them. And that means everything, not just the interest rate.
aaa
aaa   |     |   Comment #115
Penfed took over Belvoir few months ago. Now Valor. Whiskey Tango Foxtrot Penfed is up to?
Hank2
Hank2   |     |   Comment #117
My answer is: Up to no good.
Sylvia
Sylvia   |     |   Comment #123
We might be witnessing industry consolidation. All the CUs that PenFed's been picking up recently seem to be on the small side. I read of one that had only 2K members and $28 million in assets. That was NAVFAC in Honolulu. It joined w/PenFed in December '15. With all the sophistication that savvy consumers have come to expect, it's probably hard for any retail financial institution to be competitive without some bulk. PenFed is being opportunistic.
ATT
ATT   |     |   Comment #119
Looks like they are rushing this which makes me uncomfortable. I have no funds in Valor but 3 CDs with Penfed. Lately my money has been moving out of Penfed because they are no longer a rate leader. I have a CD coming due in a couple of months which will most likely go elsewhere. Looks like they are spending funds on taking over a troubled CU and paying bonuses instead of taking care of their own.
GEK
GEK   |     |   Comment #120
PenFed is and has been perusing and acquiring C.U.s to merge with. From a Valor stand point, it's probably the rite decision as it appears Valor is quickly becoming insolvent and heading for failure. I'm certain the terms of the acquisition are highly favorable to PenFed on the whole. Growth has been the objective for PenFed.
Real
Real   |     |   Comment #121
Way to grow the customer base w/o offering competitive CD rates! New CEO, new model!
ATT
ATT   |     |   Comment #122
You could be right as at looks like Penfed is paying nothing and some new members except for the bonus to employees and on share accounts. Of course for Valor it is good as they appear to be in trouble. Penfed is becoming irrelevant to me as they are no longer a rate leader. Growth isn't always good either.
James Barnes
James Barnes   |     |   Comment #124
Do we know what all of the terms and provisions of our Prime Rate certificates will be if the merger is completed?
Bozo
Bozo   |     |   Comment #125
PenFed is once again chasing the sub-prime auto financing market. Ads are appearing daily in our local newspaper (San Francisco Chronicle) and ad blasts are going out to PenFed members.
???
???   |     |   Comment #126
They're serving the military primarily, so it makes sense they want cater to the young recruits and the low pay of our soldiers. 0.99% for a car loan taken from your pay when your young and don't have excellent credit sounds good.
hank
hank   |     |   Comment #127
merger with penfed was approved yesterday by valor membership
higgens91
higgens91   |     |   Comment #129
Is there a link anywhere that mentions the vote tally? I had no doubt it would pass, probably by a wide margin, but I'm still curious... or is it just typical "trust us, it passed" Valor? In a fair world, after all the crap Valor put their members thru, the MEMBERS should be the ones getting the 10% bonuses on everything, not the employees that crashed and burned their own institution -- and instead give the employees something like the 1% "bonus" they're giving us members (only valid on change currently in their wallets/purses -- only valid for change in Canadian dollars, for coins dating from 1996-1997, and not to exceed 40c or a wad of gum, whichever is higher).
Sylvia
Sylvia   |     |   Comment #130
higgens91, "vast majority” is PenFed's description. This is their release dated Tuesday, http://www.prnewswire.com/news-releases/valor-federal-credit-union-members-vote-to-merge-with-penfed-300403879.html. That statement appears on both sites. I’ve seen no actual stats. Ballots were probably still rolling in from out of the area at time of announcement as deadline to cast them was only Friday. I like your scheme. Your proposed small-print for 1% bonus to employees captures our worst thoughts about Valor.
Aggravated
Aggravated   |     |   Comment #131
I'm a Valor customer who received paperwork to fill out from PenFed yesterday concerning the IRA CD I have. I'm not liking the generic application / transfer forms I'm being told I have to complete, which include details that I feel could be "mapped" just as well as my checking/saving acct. I'm also not liking in the Disclosure Statement XIII that states, "The credit union reserves the right to make changes in the terms and conditions of its IRA program without prior notice." Original notice from Valor states the transfer will be made with same conditions, but also states everything will become PenFed products a month or so later. So do I fill out this paperwork or skip it? What happens if I skip it? There are no rates on these application forms.
Sylvia
Sylvia   |     |   Comment #132
My Valor CD is in a taxable not IRA account. I've yet to receive any paperwork. With those qualifications in mind, my possibly wild guess: PenFed wants to get on record your active agreement to their rules should you later squawk about changes from Valor ones. You've raised very valid questions. If there's no explanation accompanying paperwork, call PenFed with your questions. You're owed an explanation.
LuvCD
LuvCD   |     |   Comment #133
And...your money is still "there?"
???
???   |     |   Comment #134
nobody gets away with anything with you hanging around huh
Big Boy
Big Boy   |     |   Comment #135
I was thinking the same thing. I have an IRA CD and a taxable one. I'm thinking that they want to have the agreement on record to satisfy IRA contribution requirements. Hopefully they don't change the rates.
hank
hank   |     |   Comment #136
I got a letter from penfed yesterday that they will honor the rate of the certificate until maturity. They said they will not accept further add on deposits
Valor Credit Union Sends Release Forms to Members with Prime Rate Certificates

DA readers with Valor Credit Union Prime Rate Certificates have reported in the DA forum and in emails about receiving certified letters from Valor. I have not seen a copy of these letters, but based on readers’ descriptions, the letters include a release form in which the member agrees not to pursue further action against Valor for changing the terms to their Prime Rate Certificates (no longer accepting add-on deposits). In return, the credit union will allow add-on deposits of up to $25,000. The letter asks that the form be...

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TobyFCU’s New Prime Rate Certificate Is Still a Good Deal

One of the best deals this year has been the Prime Rate Certificate from Tobyhanna Federal Credit Union (TobyFCU). In November it appeared this CD had ended, but I’m happy to report that TobyFCU has brought it back. Unfortunately, there has been a change for new CDs. There is now a $100,000 cap. The portion of the balance over $100,000 will now earn only 0.05%. Also, it’s limited to one per social security number. All other of its features and terms remain the same, and if you already have this...

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New Kasasa Accounts with a High-Yield Reward Checking at Tobyhanna FCU

A couple of weeks ago I mentioned one of the good deals at Tobyhanna Federal Credit Union. There are other deals that are noteworthy. Those are Kasasa accounts, and one of these accounts is a high-yield reward checking account, that’s called Kasasa Cash. There’s also a savings account called Kasasa Saver which links to the checking account, and there are two other reward checking accounts. One is Kasasa Cash Back which offers cash back on debit card purchases, and the other is Kasasa Tunes which offers refunds on iTunes and...

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TobyFCU’s Prime Rate Certificate Is a Great Long-Term CD Deal

One of the good deposit deals at Tobyhanna Federal Credit Union (TobyFCU) is its Prime Rate Certificate. It has a 7-year term and its rate is based on the Prime Rate (Prime Rate - 3.25% with a floor of 3.04%). Since the current Prime Rate is 3.25%, the current certificate rate is the floor rate of 3.04%. That’s a very competitive rate for 7-year CDs. The rate is variable, but it can only go up since the floor rate is 3.04%. Another nice feature of this CD is that additional...

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New Eligibility Options for Tobyhanna Federal Credit Union Membership

It’s always nice to see a credit union that has many good deposit deals make it easier for people to qualify for membership. That’s the case with Tobyhanna Federal Credit Union (TobyFCU) which is based in Scranton, Pennsylvania. Members of American Consumer Council (ACC) can now qualify for membership in TobyFCU. There are several good deposit account deals at TobyFCU that should interest savers. I’ll cover these in the next few days, but I first wanted to highlight this eligibility change.

The full details of TobyFCU’s membership qualifications are listed in...

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