Fascinating and potentially troubling development in the world of Credit Unions.
The story is the Wings Financial Federal Credit Union’s unsolicited and unwelcome bid to merge with Continental Airlines Federal Credit Union.
Wings have set up a site, and this ‘advantage’ is displayed.
This will be interesting to follow. While legal, it goes against traditional CU methods and views, and raises lots of issues.
Bankwatch 
It’ll be interesting to see how this one pans out. I’m sure many people will be keeping a close eye on this one!
In addition to the unprecedented direct solicitation of Continental’s member-owners,Wings is actually attempting to buy Continental’s accumulated members’ equity dirt cheap. See this data from the 12/31/06 NCUA 5300 Call Report for Continental:
PCA Net Worth Calculation Worksheet, Line 7:
Total Net Worth $29,866,049
Miscellaneous Information, Line 4: Current Members 25,097
Therefore, members equity per capita is $1,190.02. Wings wants to pay $200.
In other words, Continental wants to buy $29,866,049 of members’ equity for $5,019,400.
Personally I wonder just how well they have thought out this strategy and think the $200 is bogus.
Will they pay every member of CFCU $200 if the merger is approver, but before the merger is consummated? Would WFCU members really like to see an expenditure of over $5,000,000 for this purpose? Will NCUA allow such an expense and it would have to be an expense and not a dividend as CFCU members are not WFCU members.
If the payment is after the merger and done as a dividend every member of WFCU should get the $200, upping the cost to about $27,000,000.
The merger may occur but I really doubt anyone will ever see the $200.