Lake Michigan Vote Expected to be Close as Member Debate Continues

GRAND RAPIDS, Mich. – On December 8, members of the $1.1 billion Lake Michigan Credit Union will file into the Forest Hill Public Schools Fine Art Center in time for a 5:30 p.m. meeting which will debate and eventually decide whether Lake Michigan will remain a credit union or whether it will become a mutually chartered bank. Members of the credit union generally decline to predict a winner and say only that they expect the vote to be very close. Two-thirds of the members that participate in the vote must vote in the affirmative for the change to move forward. Les Shoemaker, a 10-year member of the credit union, said that he planned to vote against the proposed change and that his family, wife and two adult children who are also members, plan to vote against it as well. “I have never trusted the leadership about this vote,” Shoemaker said. “They say it’s for the good of the members, but it seems like they will make out pretty good themselves,” he added. In a letter to the Grand Rapids Press which ran on November 25, Thanksgiving Day, Shoemaker wrote the paper to take issue with the way he said Lake Michigan had been using the term “savings institution” rather than the word “bank.” “The phrase `sly as a fox’ comes to mind when I read all the hype to promote the change,” Shoemaker wrote. “The only benefactors are the officers and the board of directors. I’m voting no and am looking for another credit union.” But another member, Richard Meyers, wrote in the same issue in favor of the conversion. “Either members vote for the conversion and keep fees and interest charges to members low, or they vote against the conversion and the credit union will have no option but to charge higher fees and pay lower interest to raise capital,” he wrote. Meyers, who is a Certified Financial Planner, said that he had about 20 clients who are teachers and who are members of the credit union. He reported that they have asked him his opinion about the vote and that he has urged them to vote yes. “It’s really a matter of what is going to be good for the long term growth of the institution,” Meyers explained. “Lake Michigan has been doing very well and has probably outgrown its time as a credit union,” he said, adding that he had been a Lake Michigan member for 34 years. Myers said he was surprised that the regulator allowed the credit union to offer prizes to members to vote in the charter change decision, but added that he could understand why they did so. “I expect that maybe 2% of members really care about this, either for or against,” Meyers said, “so the credit union needed to use something to get people to pay attention,” he added. He also estimated that the credit union may have benefited from having the prizes in place since the members who opposed the move would be more likely to turn out to vote against it. Neither Meyers nor Shoemaker would predict a winner of the election, though each predicted the vote would be close whichever way it went. Meyers said the memory of an ugly bank takeover in which a local institution, Old Kent Bank, which had been founded in Grand Rapids and had been widely liked had been acquired by Fifth Third, was turning out to be a significant hurdle for Lake Michigan to overcome. “The Old Kent buyout was just ugly all around,” Meyers said, adding that he had about 50 clients who had been either stockholders in the bank or customers or employees. “The only people who came out ahead, mildly, were some of the depositors who got some higher interest on their accounts,” he said. “But there has been a sharp drop in customer service as well as lost jobs. People don’t want to see that happen again and voting against the Lake Michigan change might give some of them a chance to weigh in, symbolically, on what happened at Old Kent.” Lake Michigan members have had ballots since early November and have been able to vote by mail as well as attend the meeting. -