October 23, 2006 Mr. Arnold S. Rosenthal, Chairman Lafayette Federal Credit Union 3535 University Boulevard Kensington, MD 20895 Re: October 17, 2006 Letter from Michael S. Hearne Dear Mr. Rosenthal: The undersigned are in receipt of the above referenced letter. We are writing to express our concern at the board’s inability to simply and forthrightly answer the questions in our October 3, 2006 letter, in spite of our follow-up request of October 13, 2006. We are also surprised to have received the aforementioned letter from Michael S. Hearne, President/CEO of Lafayette Federal Credit Union. Absent your notice to the contrary, we will assume that Mr. Hearne’s letter speaks on behalf of the board of directors, our elected representatives. Assuming Mr. Hearne was authorized to provide this response by the board of directors, we have the following additional concerns. First, we are concerned that the document inspection offer does not include all of the documents related to the conversion proposal, as we requested. Additionally, while we do not object in principle to executing a confidentiality agreement, we would need to review the agreement beforehand (and possibly retain legal counsel to advise us) to ascertain that it would not preclude us from releasing information to other members, etc. that reflects misfeasance, malfeasance, or nonfeasance on the part of the board in performing its responsibilities to the members in approving and recommending the conversion. Finally, Mr. Hearne informed us that the Credit Union “will not make our mailing list available to you nor assist you in contacting our members.” As you know, we did not ask, in either our October 3 or October 13 letter to you, or in our October 11, 2006, letter to Mr. Hearne, for a copy of the Credit Union’s mailing list. In fact, in our October 11, letter, we stated that “we recognize that member privacy rights dictate that Lafayette cannot just hand over to us a membership list mailing list.” Mr. Hearne’s mischaracterization of our request is troubling. What we did request was access to the Credit Union’s mailing house so that we could provide our materials to be mailed to the
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members by that third party service provider.1 We also requested that where appropriate, the Credit Union e-mail our materials to the members. Mr. Hearne’s statement that “[we will not] assist you in contacting our members” belies his stated representations to approximately 100 members at the September 8, 2006, “town hall” meeting at the U.S. Agency for International Development wherein he pledged that the Credit Union would inform all members about the establishment of a website where they could post e-mails presenting their thoughts, opinions, questions, and concerns relating to the proposed conversion. You should recognize that we are but a few members of the Credit Union that will be affected by the vote and that the answers to our questions have importance to all of the members of the Credit Union. Given the importance of providing and distributing the answers to all of the members, so that they can make an informed decision, it makes little sense for us to receive the board’s answers orally at the meeting proposed by Mr. Hearne. Additionally, it is safe to assume that the board would want to ensure that the responses to our questions would not be susceptible to unintentional inaccuracies or misstatements when they are forwarded by us, in writing, to other members of the Credit Union. For these reasons, the offer to meet with the board in lieu of a written response is unacceptable.2 Hopefully, after receiving the board’s written answers to our questions, a meeting would be unnecessary. This letter is our third, and likely our last, letter to the board of directors concerning a written response to our questions which were derived from the statements made in the Credit Union’s information and notice materials. Unless we have written answers to the questions presented in our October 3, 2006, letter in hand by close of business on Tuesday, October 24, 2006 -- three weeks since we submitted these questions -- we will assume that the board of directors is not genuinely interested in exercising its legal duty to represent the interests of the members, and will take appropriate action that we believe is truly in the interests of the members. Sincerely,
We further asked that the Credit Union bear the expense of the mailing given the importance of having the members hear all sides on the issue of conversion. However, we also stated that in the event that the Credit Union will not bear such costs, we requested an estimate of the reasonable cost that would be associated with the credit union mailing (for us). 2 Another practical consideration, but clearly tertiary to the reasons stated above, is the proposed scheduling and location of the meeting (i.e., during week day working hours at the Credit Union’s headquarters in suburban Maryland). We are employed individuals who cannot easily leave our jobs in the District of Columbia to attend such a meeting, let alone coordinate our work schedules to attend a meeting at such a distance from our workplaces. We appreciate that many of the directors are similarly situated. The efficiencies of a written response clearly outweigh those of holding such a meeting.
1
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Ajit V. Joshi
Amber Brooks
Audrey Sturdivant
Jeffrey Merriam
L. James Alrutz
Marcus L. Stevenson
Ronald E. Sturdivant
Scott R. Stiens
Thomas R. Carter /s/ Debbie Lester cc:
William A. Brooks, Jr.
Norman Cohen, Chairman Emeritus Barton Veret, Vice Chairman Richard Ginsburg, Secretary LeAnn Oliver, Treasurer John Farmakides, Board Member Thomas Harmon, IV, Board Member Kenneth Lanza, Board Member Drew Luten, Board Member Michael S. Hearne, President/CEO The Honorable Eleanor Holmes Norton, Member of Congress The Honorable Chris Van Hollen, Member of Congress