Dave Keffer figures he’s called more than 50 members of Cornerstone Federal Credit Union over the past few days.
He looks up their numbers in the white pages, drawing from memory on his 33 years as Cornerstone’s CEO. When he hits a wrong number – it happens often – he hangs up and moves on to the next one.
Keffer, 68, retired as Cornerstone’s CEO in 2014. Now, he is waging what started as a one-man campaign, saying he wants to help members of the three-branch credit union he used to lead make an informed decision when they vote on whether to merge with Belco.
Leaders at both institutions tout the partnership as an opportunity to offer Cornerstone’s 11,000 members the advantages of belonging to a larger, but not too large, credit union: more branches, updated technology and competitive loan and savings rates. Employees, too, will benefit, they say, from having more opportunities for training and career advancement.
But Keffer believes members aren’t hearing the whole story. Belco, he says, will not offer better rates and is doing little more than taking away local control of the Carlisle area’s hometown credit union. Through his phone calls, attendance at meetings and a series of newspaper and radio ads, his one-man campaign has grown into a small community effort of homemade yard signs, posters and media outreach to educate members.
“We’re fighting desperately uphill to make sure members have an informed choice,” he said.
Pros and cons
Belco and Cornerstone’s leadership see the merger as a marriage of two strong partners.
Cornerstone, which has about $105 million in assets, could survive independently, CEO Sam Glesner said Wednesday. However, issues like increased regulatory requirements and the looming need to update technology, especially data-processing systems, led the board to start looking for ways to merge into an institution with more resources.
The board looked at other potential merger partners before choosing Belco, Glesner said. Some of the other credit unions they considered were too large for Cornerstone to offer much value, while others had too much overlap in Cornerstone’s branch network.
Belco seemed like the right fit. Like Cornerstone, it is financially healthy. It does not have branches too close to Cornerstone’s footprint, but it does have members in the Carlisle area. The two credit unions even shared similar roots going back to charters with telephone companies.
Belco also is large enough to offer resources, including certain member services and employee development opportunities, that Cornerstone could not, Glesner said. Belco has about $450 million in assets, 11 branches, and 52,000 members in Adams, Cumberland, Dauphin, Lancaster, Lebanon, Perry and York counties.
“We’re just really excited to bring together two strong credit unions,” said Amey Sgrignoli, Belco’s president and CEO.
That mutual strength is part of the reason some of Cornerstone’s members oppose the merger. If Cornerstone can continue to survive independently, as it has done since its founding in 1974, why change?
“If I wanted to be a member of Belco, I would simply go to Belco and open an account,” said Cornerstone member Julie Hallisey.
Hallisey has had an account with Cornerstone almost since birth, when her grandmother opened one for her. That was 34 years ago. Now, Hallisey, a Realtor, worries that the Belco merger will bring more fees, higher interest rates on loans and a decline in customer service.
“Cornerstone has always been a nice family company. Everybody knows everybody when you walk in there,” she said. “My concern is, it’s going to become more like your traditional bank and not a hometown credit union.”
Sgrignoli and Glesner are sympathetic to those concerns, but believe they are unwarranted.
Rates and fees are market-driven, Glesner said, and are always in flux depending on a range of economic factors.
Cornerstone’s leadership will continue to play a role at Belco and will have the ability to help set rates moving forward, Sgrignoli added. Belco also intends to keep Cornerstone’s employees through the merger, which means members will still deal with the same familiar faces they’ve always seen.
“The financial cooperative structure that we have here really ensures that members will continue to have a say, and they will continue to also have board representation as we move forward,” she said. That includes Glesner, who will join Belco’s executive team.
Keffer isn’t convinced.
Cornerstone will inevitably have less of a say in its operations after the merger than it does now, he said. This change, he believes, cannot be good for members.
“It’s heartbreaking for me,” he said, noting he devoted his life to Cornerstone and probably knows more than most members about what is at stake. “I’m willing to put everything in to try to turn this around.”
Who controls the message?
Keffer compiled a list of statistics he believes point to worse service for members if the merger goes through: higher branch costs at Belco, higher credit card rates and, of particular concern for Hallisey, a lower proportion of first-time mortgages, just to name a few.
He has handed this list to members at meetings the two credit unions have held about the merger. He also passed it along to Chip Filson, a writer for a national online credit union newsletter and co-founder of Callahan and Associates, a credit union research and consulting firm.
Filson has helped attract additional members to Keffer’s cause. He believes too many credit unions across the country, not just Cornerstone and Belco, are providing too little information to their members about the downsides of mergers.
The number of independent credit unions has decreased drastically since its peak in the early 1970s, mostly as a result of small institutions teaming up to stay afloat, Filson said. Those kinds of mergers make sense, Filson believes. What he disagrees with is larger credit unions taking over smaller ones that could survive just as well, if not better, on their own.
The biggest issue this trend poses is that credit union members – who actually own the institutions being sold – often know very little about the deliberations leading up to the credit union’s directors’ decision to merge. After the boards have made up their minds, he said, they only share information that puts the merger in a good light, ensuring the membership will side with them.
“There’s no checks and balances,” Filson said. “Because once (the vote’s) done, you can’t undo it.”
Sgrignoli and Glesner said they have done the best they can to keep members informed about the proposed merger. They have sent letters and postcards to members through the mail, published an eight-page FAQ sheet on Cornerstone’s website and held meetings where members could ask questions.
“We’ve been very transparent throughout the merger process about what we’re doing,” Sgrignoli said.
Cornerstone’s members will have the opportunity to vote on the merger in person at 6 p.m. Thursday at the Comfort Suites in Carlisle. Those votes, along with ones cast by mail ballot, will be tallied by a third party.
The credit unions should know by early next week whether members approved the merger. If the vote is yes, Cornerstone members will likely transition to Belco by about fall of this year. If the vote is no, Cornerstone will continue to operate independently.