Credit Union Target Of Takeover Effort

[rumpel]

Posted date: 3/19/2007

FINANCE: Rival plays hardball with El Segundo’s Continental.

By JABULANI LEFFALL
Los Angeles Business Journal Staff

Marketing employees of Wings Financial Federal Credit Union found themselves in a curious predicament recently: they were kicked off the grounds of their El Segundo rival, Continental Federal Credit Union.

Team members, including a business development executive, from the large Minneapolis-based institution had entered the lobby of the home branch of Continental credit union. They passed out flyers to employees and customers touting the benefits of a merger – one that had already been rejected twice by Continental’s management and board.

In effect, Wings had launched an unprecedented hostile takeover attempt of its rival – something previously unheard of in the collegial world of credit unions.


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“It was like Pearl Harbor. They sucker punched us. It’s been made plain we’re not interested in any type of deal,” Glatt said. “He needs to back off. We can make decisions for ourselves on what is best for our credit union and workers in the industry that we serve.”

The events of March 9 were an oddity in an industry where mergers are not unknown, but usually proceed through traditional channels, such as arrangements in which regulators strive to save struggling credit unions by merging them with financially sound ones.

However, the aggressive takeover attempt by Wings – likely the first of its kind – may not be the last. It was spawned by a recent decision by the federal National Credit Union Administration to loosen the restrictions governing credit unions that have Trade, Industry and Profession charters.

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