The board of Continental Federal Credit Union on Tuesday voted unanimously to reject a merger proposal by Wings Financial Federal Credit Union.
Since March 9, when the Minneapolis-based concern tendered its third offer to the El Segundo group in 18 months, Wings had been wooing Continental's members with promises of cash and service incentives that equaled $1,200.
Wings marketing executives even went so far as visiting their rival's lobby and passing out flyers to credit union members on-site as well as at Continental Airlines terminals at LAX and Newark International Airport in New Jersey. With a 7-0 vote, the board sent a clear message, according to Continental Chairman Allan Cooper.
"This didn't bring any compelling value to our membership," Cooper said. "The board saw Wings' offer for what it was: a blatant attempt to buy our members votes and convince them to hand over our network and members' sizable assets without any real value in return."
Tom Glatt, chief executive of Continental, said he was relieved after the board rebuffed Wings for a fourth time and criticized the firm's aggressive maneuvers, which he called "a very bank-like approach" to merging with another company.
"They haven't been a good citizen in the credit union world," Glatt said. "Our members and board have spoken in unison and the next step will be to draft a letter saying we formerly reject this and we hope to move on with our own initiatives after that."
Fred Becker, president of the National Association of Federal Credit Unions, like Glatt said that he believes rules should be put in place to prevent Wings or other large groups from attempting similar "hostile takeovers" in the future.
"This type of behavior threatens the very heart of the credit union system," he said.
Wings executives were not available for comment.
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