Conference 7.286::dcu

    Does someone have the times and pole locations of the remaining
    meetings?
    
    Thanks,
    Jack

  DCU's new president visits from Livewire:
    
    Mon 10/21	   Taylor St. Littleton	 MIT Conference    Micheline Wold
    11:30-1:00	   TAY2-1/E5		 Room		   DTN/227-3004

    Wed 10/23	   Marlboro		 Customer Tech.	   Amelia Lopes
    11:30-1:00	   MRO1-3		 Ctr. Rms 2-3	   DTN/297-7289
    
    Mon 10/28	   Mill			 General Doriot    Jennifer Sund
    11:30-1:00	   MLO4-5		 Auditorium	   DTN/223-7190
    
    Mon 11/4	   Shrewsbury		 Conference Room   Janet Stanisz
    11:30-1:00	   SHR1			 360		   DTN/237-2177
    
    Tues 11/5	   Merrimack		 Merrimack Conf	   Glenna Godin
    11:30-1:00	   MK1			 Room		   DTN/264-8788
    
    Thurs 11/7	   Spitbrook		 Liebniz Conf	   Gloria Fawcett
    11:30-1:00	   ZKO1, 1st fl		 Room		   DTN/381-1565

Minutes of meeting w/ new DCU Pres. Chuck Cockburn (CC) at MLO 28Oct91

These are just rough paraphrases and condensations, but are essentially correct
(I missed the first 5 min.). There were ~20 people including several DCU
members and Mark Steinkrauss, the board chairman.                


* Discussion about areas DCU could improve:

Q:  Add branches in outlying areas?
CC: DCU probably wouldn't gain many members since people chose banks according
    to branch access & DCU couldn't compete.

Q:  Setup lunch-time access at branches?
CC: It's under consideration.


* CC: DCU internal controls consist of:

1. Supervisory committee: usually 3-5 people appointed by BOD to act as a check
(like the 3 branches of the US gov). The committee should work w/ internal &
external auditors.

CC: The problem was the Mangone didn't work to advise the committee.

Q:  How can it be independent when it's appointed by the board and has 1 board
    member? Can the appointment method be changed? It hasn't met in over a year.
CC: It has 2 members - one of whom isn't sure he wants to serve. Any supervisor
    can call upon the NCUA to step in.

Q:  Why should a board-appointed supervisor ask the NCUA to step in?
CC: Any member can request the NCUA to step in.

CC: The board will appoint 3 new members in the next week who will serve till
    April (time of annual meeting). An unchangeable by-law requires that it be
    appointed by the BOD - I need to check this.
    
2. Internal auditor:  none at DCU. Most CU's don't have one but large ones do.
Will hire one in 30 days.

3. External auditor: the old auditor should have done a better job in advising
the DCU. Now switching to O'Roark & Clark (sp?) which is the most experienced
dealing w/ CU's.

Q:  Why weren't the auditor's reports available since '85 w/ annual reports.
CC: All auditor's reports will be available at the branches for the usual fees.
Let's allow other members of the audience to ask questions. 

4. General council - also has a function to see if the board is representing the
members' interests. It was part of the Mangone fraud so it's been replaced w/
Joe Massione (sp?).

5. policies & proceedings


* Profitability model:

CC showed a sample CU balance sheet of income, expenses & capital ratio.

Q:  Why can't you use DCU's real financial report?
CC: We're using this example.

Profits go into reserves & undivided earnings (which can be distributed as
dividends. Average CU capital ration = 6%. Institutions are trying to slow
growth to improve the ratio by affecting the ratio's denominator. 

Before deregulation in 82, CU's were easy to run since regulations fixed:
CU deposit interest <= 6%, loan interest <= 12%
bank "         "    <= ~5.5%

and there were no IRA's, CD's or Money Market (MM) accounts.

Presently NCUA has 1.2% reserve to backup failing CU's. In contrast the FDIC
is nearly broke. To compensate for not paying taxes, NCUA charged member CU's
to build up this reserve. E.G. To compensate for a recently failing Mass CU,
DCU was charged $250,000 in accord to its size.

* Loans: 

DCU's ratio is 4.2% now but I (CC) feel it should be 8-10%. Thus to increase
profit to build up reserves, the DCU needs to move money from investments
(which return ~6%) to loans (~10%). DCU historical loan loss ratio is .3% but
it's difficult to increase loans in the present climate. The DCU need to
concentrate on:

1.  rates - auto rate has already dropped. Line of credit is at 17.25% but
    should be ~15%.
    
2.  service - 24 hr loan turnaround - thus centralize in main office. All
    contacts should be excellent. Presently there are bureaucratic roadblocks
    so need to change policies. DCU needs to be customer driven.

3. terms - ease loan restrictions

4. sales & marketing

DCU could get members to refinance loans presently w/ other banks into DCU
loans.


Q:  I presently have a large deposit and my only loan w/ the DCU, what else can
    I do to help the DCU?
CC: You should make financial decisions based on your self interest.


* Fees: 

A lack of fees puts pressure on other profit areas. We need fairness through
relationship pricing. The DCU should base fees on the total of balances in
checking, CD's, MM, savings, IRA's instead of just CD's. Fees are needed for
accounts w/ both low totals & low  checking since they're unprofitable. It's OK
if the total is high or checking is high. Totals will be calculated by
household.

If the DCU reaches the 10% ratio, the it can lower loan rates, raise savings
rates or open more branches. Private backs would pay dividends to their owners.


Q:  What have DCU employees been told about the special meeting?
CC: The same as the mailing. If some one asks me, I think removing the board
    would be disastrous after the Mangone problems since I have nobody to
    consult w/ for 90 days. The NCUA might setup reporting to the NCUA regional
    director. Also an entirely new board would be inexperienced. One of the
    reasons I selected this job was after interviewing w/ the board & seeing
    its competence.
Q:  Lack board is unimportant since it only meeting once a month.
    
Q:  Are DCU employees required to come to the meeting?
CC: No. No one will be coerced.

Q:  Callers to the DCU are getting false info on the special meeting.
CC: Most people calling the DCU for info are happy w/ DCU & upset about the
    move to remove the board.

Q:  The checking fee notice was poor, we need notices in the branches.
CC: DCU will communicate in advance and not use gimmicks.

Q:  Baybanks also totals in IRA for checking account fees.
CC: DCU will do that.

Q:  What is the purpose of the information policy?
CC: A small group (6-10) has been bombarding the DCU w/ requests for info so
    that an assistant has spent 50% time on this matter. The requests of a few
    are costs that are borne by the entire membership.

Q:  Please give me some evidence to backup your assetion that there are too
    many requests.
CC  I don't have to. You have no reason to know.

Q:  After the problems w/ the bad loans, DCU has a credibility problem and
    needs to be as open as possible.
CC: Only a small number of people active in VAXnotes came to the 2 meetings w/
    the board and they still want to ask more questions after those many hours.

Q:  What is VAXnotes?

    My personal comments on 29 Oct meeting w/ Chuck Cockburn:


.3> Q:  Why should a board-appointed supervisor ask the NCUA to step in?
.3> CC: Any member can request the NCUA to step in.

    I wonder what the history has been of the NCUA taking over at other
    CU's. What actions did it require? What does it a takeover mean?


.3> CC: The board will appoint 3 new members in the next week who will serve 
        till
.3>     April (time of annual meeting). An unchangeable by-law requires that 
        it be
.3>     appointed by the BOD - I need to check this.
    
    Does this mean that if the special meeting votes out the old board,
    and a special election votes in a new one, then the new board will be
    in conflict w/ the supervisory committee. I feel that appointing a
    committee should come after any steps to form a new board. Also that
    the committee should be elected.


.3> 3. External auditor: the old auditor should have done a better job in
    advising
.3> the DCU. Now switching to O'Roark & Clark (sp?) which is the most
.3> experienced dealing w/ CU's.

    If the old auditor's reports on the Mangone loans were correct but were
    withheld by Mangone and the board then this replacement sees to be
    quashing the whistleblower.


.3> Q:  Why weren't the auditor's reports available since '85 w/ annual reports.
.3> CC: All auditor's reports will be available at the branches for the usual
    fees.
.3> Let's allow other members of the audience to ask questions. 

    Mark Steinkrauss gave a similar reply at the second meeting w/ the
    board. Are these reports available?


.3> Average CU capital ration = 6%. Institutions are trying to slow
.3> growth to improve the ratio by affecting the ratio's denominator. 

.3> Q:  I presently have a large deposit and my only loan w/ the DCU, what 
.3>     else can I do to help the DCU?
.3> CC: You should make financial decisions based on your self interest.

    Logically this implies that the DCU will try to use rates to increase
    short-term loans and reduce to slow-down deposits (likewise w/ other
    banks).


.3> DCU's ratio is 4.2% now but I (CC) feel it should be 8-10%. Thus to increase
.3> profit to build up reserves, the DCU needs to move money from investments
.3> (which return ~6%) to loans (~10%). DCU historical loan loss ratio is .3% 
    but
.3> it's difficult to increase loans in the present climate. The DCU need to
.3> concentrate on:

    I felt that Chuck's explanation of the how to build up the capital
    ratio via loans was clear (likewise w/ his presentation of checking
    fees). But this is the first time I heard a goal of 10% - at board
    meetings the goal was 7%. It's interesting that DCU bad loans were so
    low at a time when it at a time when it was much easier for the DCU to
    build up loans - but it used Mangone investments instead. Several
    notesfiles have numerous complaints about difficulty in
    dealing w/ DCU loan application bureaucracy.


.3> Q:  What have DCU employees been told about the special meeting?
.3> CC: The same as the mailing. If some one asks me, I think removing the board
.3>     would be disastrous after the Mangone problems since I have nobody to
.3>     consult w/ for 90 days. The NCUA might setup reporting to the NCUA 
        regional
.3>     director. Also an entirely new board would be inexperienced. One of the
.3>     reasons I selected this job was after interviewing w/ the board & seeing
.3>     its competence.
    
    After the second board meeting where Chuck was introduced, several
    notes looked forward to his leadership. In his previous responses to
    requests for info, I feel that Chuck is showing his strong allegiance
    to the board.


.3> Q:  Are DCU employees required to come to the meeting?
.3> CC: No. No one will be coerced.

.3> Q:  Callers to the DCU are getting false info on the special meeting.
.3> CC: Most people calling the DCU for info are happy w/ DCU & upset about the
    move to remove the board.

    It's hard to verify Chuck's replies. Some notes here contradict his
    assertions.


.3> Q:  What is the purpose of the information policy?
.3> CC: A small group (6-10) has been bombarding the DCU w/ requests for info so
.3>     that an assistant has spent 50% time on this matter. The requests of a
        few
.3>     are costs that are borne by the entire membership.

.3> Q:  Please give me some evidence to backup your assertion that there are too
.3>     many requests.
.3> CC  I don't have to. You have no reason to know.

.3> Q:  After the problems w/ the bad loans, DCU has a credibility problem and
.3>     needs to be as open as possible.
.3> CC: Only a small number of people active in VAXnotes came to the 2
        meetings w/
.3>     the board and they still want to ask more questions after those many
        hours.

    I feel that it is a pity that so few people are going to these
    meetings w/ the board and Chuck. It's worthwhile to get info as well as
    the tone. While Chuck spoke clearly on loan and fee policies, with
    questions like these his tone appeared arrogant and dismissive. To me
    he appeared like a power broker dealing hand-in-hand w/ the powers
    that be - the board. Perhaps he felt he could afford to be so since
    the opposition seems insignificant.

.3> Q:  What is VAXnotes?

    This shows that we need to get critical info out further and more
    participation in the affairs of the DCU in general.

    
    
	RE: Cockburn at MLO
    

>* CC: DCU internal controls consist of:
>
>1. Supervisory committee: usually 3-5 people appointed by BOD to act as a check
>(like the 3 branches of the US gov). The committee should work w/ internal &
>external auditors.
>
>CC: The problem was the Mangone didn't work to advise the committee.

    How can Cockburn say this?  He wasn't even at DCU or know what Mangone
    did or did not do.  This is also more scapegoating of Mangone.  People
    of the Supervisory Comm. know who they are and what their
    responsibilities are.  If they do not take them seriously, they should
    resign and allow other, more interested members take their place.
    
>Q:  How can it be independent when it's appointed by the board and has 1 board
>    member? Can the appointment method be changed? It hasn't met in over a year.
>CC: It has 2 members - one of whom isn't sure he wants to serve. Any supervisor
>    can call upon the NCUA to step in.

    Wrong Chuck.  It has three members.  It is REQUIRED to have 3 members
    by the Bylaws.  They are Dick Farrahar, Ed Brady and Jack Rugheimer
    (Director).
    
    
>CC: The board will appoint 3 new members in the next week who will serve till
>    April (time of annual meeting). An unchangeable by-law requires that it be
>    appointed by the BOD - I need to check this.
    
    At TAY I asked Chuck why not have positions on the Supervisory Comm.
    elected just as Board positions are.  He said he would check into it
    then.  An "unchange-able" Bylaw?  Be serious Chuck.  We all know there
    are no unchangeable Bylaws.  If DCU drafted a change allowing
    membership election to the position, the NCUA could then approve it. 
    Heck, members used to be able to run for the Credit Committee until the
    BoD quietly removed that right from the Bylaws.  If Chuck wants to use
    the analogy of the three forms of government, he should remember that 2
    of them are elected.  Appointed Supervisory Comm. members will likely
    be appointed due to their familiarity with members of the board than
    for  their desire to perform the duties of position.  
    
    I offer my time and energies to DCU to serve on the Supervisory Comm of
    DCU.  I can be reached at DTN 264-1680 Mark.  
    

>Q  Why weren't the auditor's reports available since '85 w/ annual reports.
>C: All auditor's reports will be available at the branches for the usual fees.
>et's allow other members of the audience to ask questions. 

    This is interesting.  Now we can read them at the branches.  Anybody
    check their local branches yet for copies?  To pay for what DCU has
    irresponsibly witheld from the membership is an insult though.  If we
    will be getting them in the future free of cost, DCU OWES them to us
    for past years.
    
>. General council - also has a function to see if the board is representing the
>embers' interests. It was part of the Mangone fraud so it's been replaced w/
>oe Massione (sp?).

	So as we have said, others at DCU have been implicated.  It just
    hasn't been highly publicized.  This would tend to distract from the
    "blame Mangone" approach.
    
>:  Why can't you use DCU's real financial report?
>C: We're using this example.

    Translation: "shut up bozo".  Chuck was asked to use real DCU figures
    in earlier presentations and said he would.  Guess the ones he makes up
    better suit the cases he is making.
    
>rofits go into reserves & undivided earnings (which can be distributed as
>ividends. Average CU capital ration = 6%. Institutions are trying to slow
>rowth to improve the ratio by affecting the ratio's denominator. 

    You're sure the last sentence is correct?  Because the denominator is
    total assets and to improve the ratio by affecting total assets, DCU
    would need to get people to leave DCU with their money.  Come to think
    of it, that's exactly what they have been trying to do.  Or their
    attitude certainly has been this way.  We need a new board that will
    make it clear to DCU's senior management that DCU's success depends on
    a broad membership base.  Chasing members away in pursuit of this ratio
    is extremely short sighted and dangerous for DCU IMO.
    
>CU's ratio is 4.2% now but I (CC) feel it should be 8-10%. Thus to increase
>rofit to build up reserves, the DCU needs to move money from investments
>which return ~6%) to loans (~10%). DCU historical loan loss ratio is .3% but
>t's difficult to increase loans in the present climate. The DCU need to
>oncentrate on:

    This is absolutely outrageous.  Before Cockburn came on board, Harry
    Goralnick was using 6-7% as a good capital ratio.  At TAY Cockburn used
    8%.  Now he is up to 10%.  The implications of this are big.  DCU will
    need to make more money from its members, period.  If fees and charges
    figure big into his plans for making this happen then we have just been
    told what we can expect from DCU in the future.
    
    
>.  service - 24 hr loan turnaround - thus centralize in main office. All
>   contacts should be excellent. Presently there are bureaucratic roadblocks
>   so need to change policies. DCU needs to be customer driven.

    Ugh.  That's member, not customer.  I'm a customer at a bank not at a
    credit union.  
    
> lack of fees puts pressure on other profit areas. We need fairness through
>elationship pricing. The DCU should base fees on the total of balances in
    
    B.S. alert.  No fees brings a lot of business to DCU that it would not
    necessarily have.  I fear Mr. Cockburn needs more than formal education
    to understand what drives retailing (yes, DCU is a retailer of money). 
    He proposes to turn DCU into the Nieman Marcus of credit unions.  Only
    the wealthy need apply.  I believe DCU should be the Walmart of credit
    unions.  Everybody is welcome and helps generate profit in one way or
    another or at one time or another.

>f the DCU reaches the 10% ratio, the it can lower loan rates, raise savings
>ates or open more branches. Private backs would pay dividends to their owners.
    
    DCU hasn't been able to reach its 6-7% goal since its total assets have
    been growing so rapidly.  Is the current scenario continues, DCU will
    never reach its 10% goal.  What he is offering he knows he'll never
    have to deliver.

>:  What have DCU employees been told about the special meeting?
>C: The same as the mailing. If some one asks me, I think removing the board
>   would be disastrous after the Mangone problems since I have nobody to
>   consult w/ for 90 days. The NCUA might setup reporting to the NCUA regional
>   director. Also an entirely new board would be inexperienced. One of the
>   reasons I selected this job was after interviewing w/ the board & seeing
>   its competence.
    
    We have years of experience with the BoD.  You have 2 months Chuck. 
    Thank you for your opinion.  We'll take it under advisement. 
    Considering the Boards involvement in the Mangone mess, retaining them
    offers no assurance of bright times ahead.  I guess Chuck
    underestimates the level of talent out in the membership waiting to
    contribute to the credit union.
    
>:  Lack board is unimportant since it only meeting once a month.
    
    Hey, where's the answer?
    
>:  Are DCU employees required to come to the meeting?
>C: No. No one will be coerced.

    Did you honestly expect him to say yes?
    
>:  Callers to the DCU are getting false info on the special meeting.
>C: Most people calling the DCU for info are happy w/ DCU & upset about the
>   move to remove the board.

    Ignorance is bliss.  If they knew 10% of what has transpired at DCU
    over the last 6 months, they would have a clearer picture.  And we know
    the amount of truth people who call DCU have been receiving.
    
>:  Baybanks also totals in IRA for checking account fees.
>C: DCU will do that.

    Didn't they say before this was illegal or forbidden by the government?
    
>:  What is the purpose of the information policy?
>C: A small group (6-10) has been bombarding the DCU w/ requests for info so
>   that an assistant has spent 50% time on this matter. The requests of a few
>   are costs that are borne by the entire membership.

    Again, release the info and there isn't an issue.  What's so difficult
    here?  Playing class warfare is pathetic Chuck.
    
>:  Please give me some evidence to backup your assetion that there are too
>   many requests.
>C  I don't have to. You have no reason to know.

    Translation: "Trust me.  DCU only invests in conservative
    investments...  Besides, who the hell do you think you are questioning
    me?"
    
>:  After the problems w/ the bad loans, DCU has a credibility problem and
>   needs to be as open as possible.
>C: Only a small number of people active in VAXnotes came to the 2 meetings w/
>   the board and they still want to ask more questions after those many hours.

    Wrong.  Thousands of members are now up to speed on DCU's approach to
    its membership and its past behavior.  Keep thinking its a few people
    Chuck.  Just bring plenty of ballots on Nov. 12th.
    
>:  What is VAXnotes?

    	No answer but I'll offer one.
    
    	It's the only form of communication that the BoD can't control and
    protect us all from.  Well, notes and e-mail...
    
    
    See you next week Chuck.  Hope you have some real DCU figures.  Want me
    to bring them? ;-)

       Would someone please ask Chuck if he's considering resigning if the
    Board is removed. He wouldn't want to work for a thoroughly trashed
    institution now would he?
                                          Denny

    
    From the latest Network brochure on Mr. Cockburn:
    
    "Most recently he was President/CEO of Rockwell Federal Credit Union in
    Downey, California, for the past 4 years - this included the credit
    unions's three most profitable years."
    
    I wonder, were these profitable years fueled by fees and charges? 
    Anybody out there in noteland near Downey, California?  Might be
    interesting to see what Chuck did for Rockwell in terms of charges and
    fees.  He'll probably try the same with DCU.

Re: .3 

At the October 11 meeting in Hudson I suggested that Mr. Cockburn 
use the DCU numbers for his capital/equity discussion.  He 
indicated that he would.  Guess he hasn't had enough time to 
re-do his flipcharts yet.

Also, after his long discussion on the role and benefits of the
Supervisory Committee, I asked him who was on it.  He couldn't 
name the members at the meeting but took my name and number to 
get back to me.  I'm still waiting to hear back on this. 

    At the meeting in TAY2, chuck promised to get back to me about the 1988
    elections.  I also reminded him that members can not get through to
    him as promised in the recent mailing.
    
    I'm still waiting......
    

Re: .9

   Interesting, I  asked him the *exact* same question on Monday 10/28, and
   he  said  he'd  get back to me by this coming Friday.  It's important to
   get  a  date  with  every  committment  so you can call him back when he
   misses it.

    Paul,   HOW DO YOU CALL HIM BACK????   his extension goes to Mary
    Madden.  There is no way to call him.
    
    Now, I ordinarily wouldn't expect to dial into an organization's
    president,  unless he asked, and he did.  He also promised to return
    information, he DIDN'T.
    

Re: .11

   Good question! At least call Mary Madden so the message will get thru to
   him  that  he  broke  his  committment.  And you can show up to his next
   meet-the-common-folks PR show and ask him directly.

   Always get a date or at least ask for one.  If you don't he can just say
   he hasn't gotten around to it yet.

    
    We ask for information.  They say will get back to us on it.  They
    don't.  We call them as they ask.  They don't take the calls.  Then
    they claim we are inundating them with information requests.  What is
    wrong with this picture?
    
    Guess we just aren't asking the questions they want to answer.
    

    Charles opened the meeting by asking if there were any 
comments or suggestions.

    Answer - "Could you please review the need for the Information
              Protection Policy?"  

    He wrote that down on his bulletin board and never referred
back to that subject again, even though twice the audience made
reference to IPP.

    The audience began queries on the participation loan losses
and the Mangone affair. For the next five minutes Charles generally
described the suit and Federal charges filed against Mangone and
the recovery of six million dollars via Mangones bond. Never through-
out the meeting did he refer to any other losses.  He commented;

   "Collusion of four or five people perpetrated fraud of BCU and DCU.
It was very sophisticated and complex.  Virtually undetectable."


   Question - "Where was the BoD during this period and what was
               their involvement?"

   Answer   - "They never saw these loans. They knew nothing of these
               matters."   

   Question - "What lack of procedures caused the loss of control?"

   Answer   - "It was not so much a lack of procedures.  No-one
               knew these things were occurring.  We now have new
               internal controls."

   Question - "What are these internal controls?"

   Answer   - "An Internal Auditor position has been posted.  We
               also have a new Supervisory Committee of three
               in place."

   Question - "May we have their names?"

   Answer   - "Steve Bahrens (sp?) and Dick Stuart. They were
               recently appointed. One slot is available and
               posted."

   Mr. Cockburn for the next 15 minutes put up a chart and 
described the "new structure" within DCU that would prevent
such mistakes as made in the past. He clearly specified a 
new outside auditor has been contacted and the start-up of
a new internal auditor position.

   Question  - "Will the membership have access to these
                auditors notes or reports?"

   Answer    - "Yes, they'll be available at a small cost."

   Question  - "Why is there a charge?  What is the cost?"

   Answer    - "A small cost...."

   Question  - "Could one view the Auditors reports and take
                notes at DCU?"

   Answer    - "Yes."


   Charles continued from there to state that "mis-statements
and lies" have been circulated concerning the Mangone affair.
And he stated also that "the person who put forth the mis-
information on Mangones personal loans is a liar".  When
it was countered that the loan rate was an extrapolation of
figures contained within the filed charges against Mangone
at Plymouth Superior Court and that the DCU refused to give
out any information on these loans, he made no comment. 

    He continually stated the need for DCU to be competitive
and profitable.  He presented a generic chart on the financial
structure of the credit union, it's profits and losses.  He
discussed the need for fees on his newly proposed services to
maintain profitability.

    Question  - "What was our profit for 1990?"

    Answer    - "We made a profit."

    Question  - "WHAT was the profit?"

    Answer    - "About $190,000."

    Question  - "What was the profit the year before?"

    Answer    - "A few million dollars."

    Question  - "What happened?"

    Answer    - "Bad loans...."

  He continued to speak for the next 45 minutes on the new services
that would be forthcoming and concluded, "We are going to be
cooperative with the membership."


  One side note:  Present at the meeting of 20 gathered were two
security personnel. At the start of the meeting I asked Mr. Cockburn,

 "Are the two security officers present as private DCU members
or were they requested to be here?"  
 
  Answer - "They can come and go as they please."

  Question  - "Did you invite them?" 

  Answer    - "I often have security at meetings."

  Security and the DCU branch manager, who I know personally, sat
squarely in back of me for the entire meeting and never moved.

  One two occasions I have had the privilege of meeting in that very
conference room with Ken Olsen.  There was no security present. 

    re: .14
    
    So who are you to question the need of security?  And do you think that
    Mr. Olsen and his family have never had the need for personal security? 
    If you do, then you are wrong.
    
    I do not believe that we should continue any discussions about security
    arrangements.  We have no idea of any situations where it may be
    necessary to take additional security measures.  Speculation about
    security may, in fact, compromise those measures.
    
    I trust Corp. Security to provide a safe workplace.

>	re: .15
>    
>    So who are you to question the need of security?  And do you think that
>    Mr. Olsen and his family have never had the need for personal security? 
>    If you do, then you are wrong.
>   
>    I do not believe that we should continue any discussions about security
>    arrangements.  We have no idea of any situations where it may be
>    necessary to take additional security measures.  Speculation about
>    security may, in fact, compromise those measures.
>    
>    I trust Corp. Security to provide a safe workplace.

I too trust Corporate Security to maintain a safe workplace.  On the other
hand, I find the presence of DEC security interesting in that I don't believe
they've attended previous meetings of this sort.  I certainly hope that Mr.
Cockburn doesn't seriously believe that he is in danger at these sorts of
meetings?  Do you seriously believe that things have gotten to the point where
corporate security is required to prevent harm from coming to Mr. Cockburn?
I think now.   

Curiouser and Curiouser things get.....


/chris

    re: .14

    >    The audience began queries on the participation loan losses
    >and the Mangone affair. For the next five minutes Charles generally
    >described the suit and Federal charges filed against Mangone and
    >the recovery of six million dollars via Mangones bond. Never through-
    >out the meeting did he refer to any other losses.  He commented;
    >
    >   "Collusion of four or five people perpetrated fraud of BCU and DCU.
    >It was very sophisticated and complex.  Virtually undetectable."
    >
    >
    >   Question - "Where was the BoD during this period and what was
    >               their involvement?"
    >
    >   Answer   - "They never saw these loans. They knew nothing of these
    >               matters."
    
    Wait a minute...I was under the impression that Mangone made a presentation
    to the BoD regarding these participation loans and that the BoD approved
    them. 
    
    Ken.... 

    The MKO Meeting 11/5/91
    
    I attended.  The questions were dominated by a few (4) people.  The answers 
    were constantly interupted by one.  I was dismayed.  I had expected to hear 
    more of what Chuck had to say.  If he was to dig a hole I expected to hear 
    him dig the hole.  I didn't expect "committee members" to put words into 
    his mouth.  I was disappointed and not by Chuck.
    
    CB Clark

    Agreed, though I didn't get to go.  It is very poor form to interrupt
    someone when they are trying to answer questions.  Chuck doesn't have
    to do these visits.  He and other Board members don't have to take time
    to communicate with shareholders.  With the new IPP they don't even
    have to give us any documentation.  Let's encourage communication and
    not let our frustrations interfere.  Poor communication is one of the
    main problems we're trying to solve!
    
    Steve

    So who was the person who kept interrupting Chuck's answers?

    
    RE: .18
    
    I was there for the whole meeting and it was a very free flow of
    information on both ends.  Everybody raised their hand.  Chuck called
    on people in order.  Everybody that was there got their questions
    answered or suggestions heard.  Everybody there that wanted to
    participate did.  I personally didn't go there to hear a 1.5 hour
    monologue from Chuck Cockburn.  Nor did I go there to hear him "dig a
    hole".  The meetings have been billed as an exchange.  Sorry if I
    interrupted the movie you were trying to watch.  Guess we were there 
    for two different reasons.  I offered suggestions to some of the topics 
    being discussed.  Suggestions that I thought were reasonable and he
    agreed.  Let's face it.  Chuck has done a LOT of these at this point. 
    He has a script and a list of items he wants to sell to people.  Many
    of the burning issues are issues he'd rather not speak about.  That
    still doesn't mean we shouldn't be asking the questions.
    
    I was also there to see if he would call me a "liar" as he did in the 
    SHR meeting.  The Mangone loan topic was broached after the meeting when 
    others were discussing issues with Chuck.  Funny, he wouldn't call me a
    liar to my face.  Mr. Cockburn, unfortunately, has turned this Mangone
    loan into a personal attack on me.  I only reported what is on public
    record.  If he has a problem with it then he should answer the
    questions the loan raises.  Personal attacks don't answer the questions.
    I do consider him unprofessional in his approach to this subject.
    
    As for "committee members putting words in his mouth", please elaborate
    because he had plenty of his own and was expressing them.  When asking 
    a question what is wrong with "At previous meetings you used equity 
    ratios of 6, 7, 8 and 10%.  What ratio is DCU looking to achieve?  6,7,8, 
    or 10?"  Mr. Cockburn is very adept at side-stepping difficult questions.
    Keeping him on track to answering the question posed is very difficult.
    BTW, there were not 4 committee members there.  Several of the people
    you accuse of dominating the questioning were people I'd never meet
    before but were very up to speed due to this conference.  One was a
    retired lady who had several questions and issues.  
    
    I feel it's entirely appropriate if a question is
    posed and the person gives an answer to something that wasn't asked,
    then to not waste the little time we had, the question should be
    clarified.  Specifically, when asked how much better he thought DCU
    could do (net profit-wise) considering the mess it was in (he's
    reviewing and adjusting all their "products" and he gave some examples)
    and he starts into a 5 minute dissertation on how good the DCU
    employees are, there was a real disconnect.  We all know DCU has good
    people.  But what that had to do with the question, I have no idea. 
    Sorry if the interruption is rude in your eyes.  But I see no point in
    wasting valuable time on answers to questions that were not asked.
    

RE:.18 by JANDER::CLARK

> The questions were dominated by a few (4) people.  

I was one of those four people.  I am not a "committee member".

Several comments:

1)  I'm somewhat impressed by Chuck.  He is NOT involved with the fraud,
    so expecting him to "dig a hole" is unreasonable.  He is trying to do
    a job that he was hired to do,  and it isn't an easy job,  right?  He
    said would do that job for a new BOD,  as long as they were reasonable.
    I kinda expect that he will get the chance.

2)  Chuck mentioned that his last BOD (Rockwell Credit Union) was a bunch
    of retired folks with nothing better to do than to look over his shoulder.
    I can see why he would dislike an overactive BOD,  but we seem to have 
    had the opposite problem.

3)  There was a discussion about fee's for low balance accounts.  I'm the
    kind of member that is losing the credit union money,  as I use it as
    as a free check cashing and cash from pay service without keeping much of
    a balance,  or borrowing any money.  DCU doesn't HAVE to provide this
    service for free.  Also,  I might use DCU for a lot more if it offered
    the right products and services,  like getting my checks back.

4)  I was ready to jump on Chuck's case over fees for ATM cards,  as the
    cost per transaction at a DCU ATM is a lot lower than the cost at a
    human teller.  He agreed and stated that promoting ATM usage is a goal.


Phil Hays

    
    Re: rude interruptions.
    
    I wasn't there, but I consider it far more rude to ignore
    the question and proceed with another agenda.  Since pols
    ducking tough questions do this as a way of life, it
    wouldn't be surprizing to see CC trying to use this method.
    Frankly, it's good that there are people who are not shy
    about keeping holding his feet to the fire.
    
    fwiw,
    Steve
    

    >I wasn't there, but I consider it far more rude to ignore
    >the question and proceed with another agenda.  Since pols
    
    I have to agree with you.  I have talked to people who were there
    and I find out that CC is VERY good at dancing around the question.
    Its just too bad that people must always bring him back to the question
    to get an answer.
    
    
    	- mark

    �I only reported what is on public record.  
    
    I thought you also speculated on the meaning of what was in the public
    record.

    
>    I thought you also speculated on the meaning of what was in the public
>    record.
    
    	I applied a standard simple calculation of interest based on the
    information in the public record.  I did not make up the numbers on the
    statement nor did I invent the calculation.  It's no more speculating
    that estimating the total cost of a gas purchase knowing the price per
    gallon and quantity.  Hey, all they have to do is send a written
    statement with the words from the previous reply and it's a done deal. 
    No private information need be disclosed.  Just an air-tight statement
    about it.  Nothing vague.  Something for the record.  But all we're 
    getting is the kind of blanket denials that we got with the 
    participation loans.  Any speculating is due to the complete lack of 
    a response from the BoD.  

.2>  DCU's new president visits from Livewire:
       [...]
.2> Thurs 11/7	   Spitbrook		 Liebniz Conf	   Gloria Fawcett
.2> 11:30-1:00	   ZKO1, 1st fl		 Room		   DTN/381-1565


This has changed.  If you look at LiveWire today you'll see "Thurs 11/8."

I called the DCU office to see if that meant Thursday (the 7th) or
(Friday) the 8th.  They said it's the latter.


---------------------------
Interestingly, they seemed not at all interested in correcting the
bad posting in VTX.  They said "That's DIGITAL who puts things in
VTX.  Not our problem."

	This morning I sent mail about this to the folks who administer 
	Livewire. They promptly replied thanking me for bringing 
	the error to their attention, and assured me that they
	had corrected it.

				Tom_K

    
    RE:RE: .18  (my response)
    
    I made an observation of the meeting a very objective observation.
    If it is wished to criticize rather than use that observation it is fine.
    I think, and this is merely my opinion, that the average DEC employee,
    DCU member, has the ability to listen to someone dancing around a
    question and determine for themselves how to weight the dance.
    
    Most employees of DEC have the experience of attending DECmeetings.
    This in itself gives one the ability to interpret a "song and dance"
    routine.  Please have the courtesy to allow those attending the meeting
    to hear what is being said.  Whether you believe it to be a dance or not
    allow those in attendance to form an opinion.  The problem associated
    with redirecting a question, as was done, is that those forming opinions 
    may form an opinion of the redirector.
    
    CB Clark

    .27> ZKO meeting evidently on Friday 11/8, not 11/7

    .2>  DCU's new president visits from Livewire:
	   [...]
    .2> Thurs 11/7	   Spitbrook		 Liebniz Conf	   Gloria Fawcett
    .2> 11:30-1:00	   ZKO1, 1st fl		 Room		   DTN/381-1565

    I'm one of the 8-9 people who sat in the Liebniz from 11:30 until 12:00
    waiting for CC to arrive.

    I wonder when the visiting day got changed?  I wonder why the correct
    information didn't get posted in LiveWire until 35 minutes before
    today's "meeting"?

    Perhaps I'll get a chance to see CC in action next Tuesday.

    -- Ward

    
    RE: .29
    
    Sorry, when a person asks a question it's not unreasonable to expect an
    answer to that question.  Please don't get upset at me for not wanting
    to waste my time listening to a speech from Chuck on something not
    related to the question.  There are so many important issues that
    needed discussing that wasting time, or allowing it be wasted, was
    something I didn't care to see happen.  I just don't have time to sit
    and watch Chuck dance.  That's a waste of everybody's time and the
    meeting is better off not held.  Nothing meaningful will result.  Our
    questions won't get answered and he'll have performed a 1.5 hour
    monologue. 
    

	I'd be more inclined to believe that this is a mix-up rather
	than anything malicious. I recall seeing the original 
	announcement that said the meeting was 11/7 in the 
	Liebnitz Room. A couple days ago I was discussing this
	with someone who told me it would be in the Couchy room.
	I double checked, and it was listed in VTX as being
	in Couchy A Thurs 11/8. The day/date conflict didn't 
	register at the time. So the date room change was listed
	in VTX at least a few days ago, but apparently, the day
	of the week wasn't updated.

	This morning it was brought to my attention that the day 
	and date didn't match, and that a check with the DCU had 
	confirmed the date as being correct. I notified Livewire
	about the error, they corrected it fairly promptly, but
	still probably around 10:30 am.

	There have been posters on the DCU branch in ZKO stating
	that the meeting is 11/8, and they've been there a few
	days at least...

	I'd be inclined to give them the benefit of the doubt on
	making an honest mistake on this one...

					Tom_K

    .32> I'd be inclined to give them the benefit of the doubt on making an
    .32> honest mistake on this one...

    I agree.  I have no conspiracy axe to grind on this issue.

    But it does seem to me that the meeting was originally scheduled for
    today, and sometime after that it was changed to tomorrow.  When that
    happens to a technical presentation, mail is ususally send around with
    a header that says something like ...

	+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

	    Presentation rescheduled -- note new Date and Time

	+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

    If I'd seen one of those, then I'd have had time to reschedule my
    Friday conflict or go to the session at Merrimack last Tuesday.

    -- Ward

    
    A simple notice posted on the door probably would have helped too.
    

The updated LiveWire notice doesn't give the floor (!), but Cauchy is on ZKO3-1.

							-- Nina

   Fri 11/8       Spitbrook             Cauchy Conf       Gloria Fawcett
    11:30-1:00     ZKO3                  Room, side A      DTN/381-1565

	Chuck's meeting at ZKO just concluded.

	The meeting was mostly orderly, except for perhaps the last 
	15 minutes when things got a bit more disorganized, but
	still more or less civil. Bill Sconce asked permission to
	record the meeting. Chuck declined.

	I am impressed with him.

	I'm a bad note taker, but here is what I took down, hopefully 
	others will fill in the holes

	Main office should be driving branches, not reverse.

	Branches now have more authority than before to do things like
	waive fees. (I asked when this had occurred, he said within
	the week, I pointed out that I had experienced a branch
	manager waiving a fee for me months ago)

	Used to be able to "only" borrow $30,000 for a car loan (much
	laughter from audience). Can now borrow as much as you can
	afford.

	Will fix current discrepancy between line of credit rates and
	limits, and credit card rates and limits.

	Need to move more money from investments to member loans.

	Things DCU did wrong with checking account fees:

		timing
		gimmick
		no advance warning
		pricing done wrong

	DCU has new computer - they can now do things they were previously
	unable to do.

	Explained profitability model - "decent" net income is 1%

*	DCU doesn't know what each product costs. Chuck intends to find out.

	Chuck wants capital ratio to grow to 8% - regulators
	want 7% - now is 4.2%

	Why were signs giving rates in branches taken down - Getting a new
	sign. (answered by local branch manager)

*	Managers didn't know what to do with investments.

*	DCU is only 70% as profitable as it should be, after excluding the 
	fraud.

*	Must turn the organization around to be customer driven and service 
	driven - #1 priority

*	DCU does a poor job of notifying members of fees, etc.

*	Previous lawyers, auditors were not familiar with CU's.


	At this point the meeting broke down a bit and I have no more 
	notes. I did read back to him the items I marked above with an asterisk
	and said in effect, "this all happened on the watch of the current 
	BoD. Sounds like they didn't do a good job". Chuck replied that 
	most of those things were average performance for a CU.

							Tom_K


	

    Chuck is a good dancer.  He danced with over 40 people including DCU
    employees.
    
    In some ways he impressed me, others he did not.
    
    I do not buy, trust me, I will not fraud you like the previous guy did.
    Neither had Mangone.  There needs to be better checks and balances for
    ALL DCU related functions.
    
    I twice asked him about his balance sheet and number.  First time I got
    A- and some C's???  Next time he told me that DCU is investing its
    money and getting a 70% return out of a possible 100%.  Never did give
    me ACTUAL numbers that I asked for.  He was prepared for the question
    and had no plans on giving real numbers.
    
    He said he chose 8% assets because HE likes the number.  Never could
    give a reason why it was good, just that he liked it...  This bothers
    me.  No one should just choose a number without knowing why.  If they
    know why, then tell us.
    
    Surveys will be sent out every 6 months...
    
    CHuck tends to generalize a lot.  i.e. The industry's average is more or
    less than us. He did this a lot.  Almost every time he was asked for some
    numbers, he came back to I have done this at two other credit unions
    and you should trust me (these are not his words but a paraphrase).
    
    Never did understand why fees were so large (boucing check etc...),
    other than that is what banks do or maybe it was that will convince
    customers to do ???.  I lost context with him on this one.  Never did
    get a good answer.  Does someone else remember?
    
    I tried HARD to get him to think about DCU and how it should 'do the
    right thing', much like DEC tries to do.  He says all credit unions do
    this.  Pretty evident he does not know anything about DEC and where KO
    came from.  I think it is imprtant that Chuck see Ken's video ont he
    company from 10 years ago.  It would be a good starting point to
    understand who DEC employees are and what their values are - in a
    general way.  It really is to bad that the BOD has not helped out here.
    
    He did not stick up for the BOD very well.  I would say he left them
    hanging a couple times.  He did talk in their favor in the beginning
    but when questioned with facts, he, said little.  I think he is open to
    see the current BOD disappear, but is careful about saying it.
    
    He still thinks we are a small group of people.  We asked him if he
    wanted each of us to call and ask for information.  He did not say much
    to that other than it was available, to which we said was an OUTLANDISH
    cost for soemthing we OWN!!!
    
    	- mark

    I want to talk about something that Mark noted.  He presced a small
    number of people to be asking questions.  I remember way back when this
    mess started that we self limited ourselves in asking questions.  
    We impossed that limit on ourselves and now we are suffering the
    consequesnces.  At the time of the decision, it was viewed as childish
    foreach of us to be asking the questions.  My guess is that to impress
    them of the number of people interested in the questions is for each
    person to request the information.
    
    on another note, my question on the 1988 election he said he mailed me
    the answer.  sure enough, when I got home, a letter was waiting for
    me.  But all it contained was the totals each candidate received.
    It did not address the vote for three issue on the ballot and how
    it was handled.  So the question in my mind is still up in the air.
    the letter says to ask Mary if I need more information.  ;-)
    It was two pages long, I guess I suckered DCU out of 50cents as
    I don't think I paid yet.
    ed
    

	Mark's reply jogged something in my mind - he said something to the
	effect that not one person had asked for information (By-laws,
	auditers notes, etc) under the IP (ie: paid for it), and attendees
	rather indignantly told him that it wasn't bloody likely that anyone
	would - that we owned the info, and were damned if we were going
	to have to pay for it.

	Chuck said that what the DCU was doing was no more than what
	the government does (if you want gov't info on something, you
	have to pay costs, if you don't want to pay costs you go
	to the federal register and read it for free, which he equated
	with being able to go to DCU headquarters and read it there for 
	free) Attendees tried to tell him that it was not unreasonable to 
	make the DCU file our "federal register" - I don't know that 
	we got that point across effectively.

				Tom_K
	

I counted 43 people.  That included the local-branch DCU staff, as well as
a couple of Chuck's staff from Maynard, who took notes, including several
explicit suggestions.

I endorse Tom's notes, and will try to avoid repetition.  I'll post more with
the answers to a couple of specific questions a little later.

Overall, impressive.  Chuck's a leader, has clear ideas, and knows how to
pursue them.  Convincing about his program -- recent examples include changes
to auto loan terms.  Believes in his vision and himself.  Has some blind spots
about the membership -- it hasn't come home to him to what extent his Digital
contituency is a community.  (I find that unsurprising, this being a special
place -- what's tough is that Chuck the newcomer is having to learn what to
trust and how to deal with his public has been complicated by the recent and
ongoing flap between the membership and the Board.)

He started right off with questions from the audience;  no prepared speech.
He worked in his messages (capital ratios, competition, etc.) very well.  I
think he listened and learned.  Most attendees will probably agree with me
if I say he should be able to survive very well if he continues to make the
rounds and subject himself to "learning opportunities" like this.

To anyone who's curious about who Chuck is:  go to one of these meetings.

Security people were there, as rumored would be the case.  In civvies,
unobtrusive.

I asked if I could tape the meeting.  He said he'd PREFER not (emphasis mine -
it was not a prohibition).  I didn't.

The major facts-and-figures balance:  DCU has $120M in investments, which is
the least desirable place to have money since the interest rate in conservative
instruments is low, say 6%.  More money belongs in loans to members.  If the
average yield of money loaned to members is 10%, the difference (10%-6%=4%)
for $120M maps to $2M+ per year difference in DCU's income picture.


A couple of bones I'd pick with him:

    o  Although he got widespread acknowledgement of his CU 101 lesson about
       costs, expenses and capital ratios, he never explained why 8% is his
       target for DCU's capital ratio.  Current is 4.2%, regulators want
       6% - 7%, he never justified HIS target, which is 8%.  He just said
       that 8% is where HE wants to get to.  (He did say something about the
       nature of the times, layoffs at Digital, etc. indicating extra
       prudence.)  He may have an analysis which justifies his 8% target,
       or he may just be relying on his experience (which might be the
       best reason for choosing a target, for all I know), but I'd be doing
       him a favor if I pointed out that one has to sell these things to
       an audience.  (That being the case, I'll send him a copy of this
       posting.)

    o  Fees were a hot topic (again).  A number of questioners tried to steer
       the conversation toward why the shareholders of a credit union cannot
       choose where they want to take the lumps represented by underactive
       accounts, but we never established good contact with him on that.  He
       showed a good grasp of shareholder perceptions about the need to
       treat all accounts of a household in some related way, and not
       arbitrarily single out certain accounts as "unprofitable" in
       wearing blinkers.  I think I remember him saying that the broad
       view used to be impossible given their mainframe, but now that they'd
       acquired a mini at HQ they can "download" and examine the whole
       picture.  (I also think I remember a remark to the effect that
       MIS departments exist to tell management "you can't do that".)

    o  The painful gap in communication has part of its roots in something
       that's probably hard to see from the President's office.  The
       shareholders perceive the CU as THEIR credit union.  The President
       reports to the Board -- the shareholders believe that in principle
       the Board reports to them, but in the current environment feel that
       the Board sees things the other way round.  Chuck HAS to have strong
       respect for the Board (any President does, or he should be fired),
       but that very respect tends to make it hard to see members' concerns.
       I'll bet that this is a very unusual situation with respect to any
       CU with which Chuck has worked.

       I'm afraid he has a stake in the Information Protection Policy --
       either he proposed it or genuinely signed on.  And without access
       to NOTES, he cannot know that requests from "a few individuals"
       represents requests from hundreds of individuals.  I'm not being
       sarcastic here:  NO one on the Board/management side has been able
       to see that responsible, controlled release of appropriate information
       would have been shared overnight among all of the hundreds of
       shareholders who have become vitally curious about the health and
       running of DCU.  In any case, up until now at least, I think Chuck has
       been genuinely convinced that the IPP was the "right" way to handle
       things.



Several times, faced with critical questions about how DCU has been run, Chuck
cited other CUs as comparisons.  Elections:  many CUs have no balloting at
all.  Auditors notes with annual reports:  many CUs have never included them.
I don't think he knows how "no worse than anyone else" sounds to people whose
savings are invested in DCU -- what he says is no doubt true, but it probably
is a much more casual thing to someone who used to work for NCUA (and from
where he may have seen many CUs which much less responsive to their membership
than DCU.)

He did, however, commit that DCU would publish auditors' notes in the future.

On internal auditors:  they exist in a cooperative atmosphere, are volunteers
and take a long time to come up to speed.  "They do not walk in the door and
audit the credit union".

On the Supervisory Committee:  "chosen by Mark, appointed by the Board".
Then independent of the Board.

"Service is my #1 focus".  Said several times, in different words.

And to one critical question, "Who are the owners of DCU?", Chuck said loud
and clear:  "The Members".


-------------------------
Overall, a good meeting.  Considering the hornet's nest into which this new
President stepped when he took the job, an excellent meeting.  Several of those
who exchanged a few words with Chuck afterwards encouraged him to keep up the
attempts at contact, and I specifically tried to convey a sense of how much
pent-up cooperation he'd find out among the shareholders once everyone has
learned to solve the communication problems.

To Chuck:  I hope you'll bear with my bluntness in this, and see that you
succeeded in getting my support.  I think you did well with everyone who was
at the meeting, and I've heard the same thing from people who have attended
your other meetings elsewhere.  I hope you'll continue such visits, and
wish you well.

Bill Sconce

Although I personally slung a few barbed questions myself, I'd have to say
that I was favorably impressed by Chuck.  This is not to say that he
answered everything he was asked.  There still seemed like a couple of
things he dodged.  The 8% number was a prime example.

In addition to .40, I have some notes from a couple of other questions.  But
first, a little background is necessary.  What follows is compressed version
of a two-sided paper handout I gave to most of the people who arrived on time
or before.

Two of the questions got asked.  I'll post my notes of the answers in a
following reply.


Handout follows:
--------------------------------------------
Some questions for Chuck Cockburn's "Meet DCU's President" meeting,
ZKO, 8 November 1991


Dear meeting attendee, and Mr. Cockburn:

These meet-the-President meetings are an excellent idea.

Not all Digital sites have DCU branch offices, and therefore many DCU members
will not have an opportunity to meet Mr. Cockburn.  This notesheet contains
some questions which some DCU members who are unable to attend these meetings
(and I) think are illuminating, timely, and appropriate to Mr. Cockburn's
visit here today.  Some of them are tough (don't shoot the messenger!), but
candid answers will help to build meaningful, trusting communications between
DCU shareholders and our credit union's professional management.
 
Because it wouldn't be fair to monopolize the meeting I will ask none of these
questions.  But if any other attendee sees fit to pose one or more of them to
Mr. Cockburn, I will take notes and make his response available to all DCU
members, upon request or electronically.

I have heard many good things about Mr. Cockburn, and look forward to his
leadership of DCU.  I wish him and DCU all possible success.

Bill Sconce
DCU shareholder
ZKO

================================================
Q.  Mr. Cockburn, in the event that the owners of DCU remove the current
    Board of Directors at the Special Meeting next Tuesday, do you as
    President feel that you will be prepared to keep the credit union running
    smoothly while the new elections are taking place?

A.  ___________________________________________________________________

Q.  You have stated that Ms. Mary Madden cannot be directed to keep her
    personal opinions to herself.  Isn't it the normal professional
    responsibility of anyone with the title of Information Officer to
    concentrate on official communications to the exclusion of personal
    opinions, especially in a situation where personal opinions can be
    inflammatory?

A.  ___________________________________________________________________

Q.  Public records show that Mr. Mangone received a statement containing
    the following text and figures.  Could you please tell us what kind of
    loan offered by DCU could result in these numbers?  In particular,
      1)  do the figures on this statement allow one to compute the
            effective interest rate of the loan, and
    2)  do the figures on this statement allow a determination of whether
          the loan was being administered to require interest-only payments?
     ========================================================================
    Mortgage 13  ADJUSTABLE RATE FIRS   Note #
    
                  Transaction         Tran    Prncpl  Intrst  Escrow   Account
    Eff Date Post Description         Total   Amount  Amount  Amount   Balance
    04-30-91      Previous Balance                                   790348.82
    05-30-91 0531 Mortgage Payment  4200.00     0.00 4200.00    0.00 790348.82
    05-31-91      New Balance                                        790348.82
     ========================================================================

A.  ___________________________________________________________________


Q.  Which fees are really rescinded for good, which fees do you personally
    think should be imposed or reimposed, and what weight do you suggest
    DCU's Board and management give to shareholders' wishes regarding fees?

A.  ___________________________________________________________________


Q.  Mr. Behrens [the newly-appointed auditor -wjs] has an excellent reputation
    within Digital.  When will shareholders see the results of his first audit?

A.  ___________________________________________________________________



Q.  Who are the owners of the DCU?

A.  ___________________________________________________________________

    
    
    I'd like to point out to all that attended today that
    
    		"I am not Phil!"
    
    (for some reason, Ed (?) got the idea I was Phil, and even said I look
    like him. Poor guy must be loosing his hair. :^)
    
    It is still painfully obvious that the BOD is 
    
    	"Communicationally Challenged" (tm)  And needs quite a bit of help.
    
    Chuck did (finally, after some pressure) give an example wherein a 
    person who had a loan, could make a late partial payment, and the
    interest(?) shown would not be reduced. This was in answer to the
    now-famous 6.5% loan question.  In my mind this pretty well layed
    this question to bed. But *why* hasn't this been done before???
    Chuck has had quite a few of these meetings. And I believe that 
    this is the first one where he tried to answer that question. 
    (rather than the "I can't tell you due to privacy issues" answers.)
    
    I was impressed with Chuck. Although he did mention 'everybody else
    does it this way' quite a few times.
    
    I remain un-impressed with our Board of Neglectors.
    
    BLD

Caveat:  no significance can be attached to the handout questions which were
not addressed.  Chuck did not duck them.  No one asked them.  The meeting was
very full, and there was no shortage of discussion to fill the time.

The idea of a handout with written questions, and written notes to pin down
answers to some of the tough questions, was entirely experimental.  (We live
in strange times...)

Further caveat:  as noted in .40, I did not use a recorder.  So this Q and A
format, while it may present an appearance of being bit-for-bit accurate, is
really only my transcription of pencilled notes.  With the notable exception
of the last question, whose answer consists of Chuck's exact words.


================================================
Q.  Mr. Cockburn, in the event that the owners of DCU remove the current
    Board of Directors at the Special Meeting next Tuesday, do you as
    President feel that you will be prepared to keep the credit union running
    smoothly while the new elections are taking place?

A.  We don't know what NCUA will do.  Maybe put in the Supervisory Committee
    as an acting Board.  They probably won't allow the CU to be without a
    Board of Directors.  He has a number of projects rolling for which he
    depends on the working relationship he has built up with the Board.
    Having them removed would stall him [my words in my notes].  All-new
    board members would require time to learn the ropes, and would be
    a problem for him.
___________________________________________________________________

Q.  Public records show that Mr. Mangone received a statement containing
    the following text and figures.  Could you please tell us what kind of
    loan offered by DCU could result in these numbers?  In particular,
      1)  do the figures on this statement allow one to compute the
            effective interest rate of the loan, and
    2)  do the figures on this statement allow a determination of whether
          the loan was being administered to require interest-only payments?
     ========================================================================
    Mortgage 13  ADJUSTABLE RATE FIRS   Note #
    
                  Transaction         Tran    Prncpl  Intrst  Escrow   Account
    Eff Date Post Description         Total   Amount  Amount  Amount   Balance
    04-30-91      Previous Balance                                   790348.82
    05-30-91 0531 Mortgage Payment  4200.00     0.00 4200.00    0.00 790348.82
    05-31-91      New Balance                                        790348.82
     ========================================================================

A.  [clarification:  this question wasn't asked in quite the way it was
    written.  What the questioner said mentioned Mangone by name.]

    This is an emotional issue for Chuck.  We did a poor job of separating
    the technical, theoretical question of how to arrive at a non-condemnatory
    interpretation of statement figures, which might have helped, and instead
    allowed a discussion of Mangone specifically.

    Chuck said he would be fired for discussing a member's financials.
___________________________________________________________________


Q.  Who are the owners of the DCU?

A.  The members.

I came away from today's meeting with Chuck Cockburn with a sense that there 
are two areas in which his understanding of the DCU community is badly lacking. 

1. He persists in blaming the BoD recall drive on "a small group of 
troublemakers," not understanding that the small group whose voices he has 
heard directly represents a much larger group via the high-bandwidth 
communication channels of notes and mail.  We really need to educate him on 
this point.  Anybody want to give him an account somewhere?

2. He doesn't understand that the culture that has evolved in this community 
places an extremely high premium on openness and Do the Right Thing.  Thus he 
thinks us unreasonable when we measure DCU's performance against very high 
standards, instead of being satisfied with his statements that DCU is average 
or better than average in one area or another.

Only once did I feel that Chuck was being less than candid with us.  That was 
when he stated that he didn't know what NCUA would do if we vote the BoD out on 
Tuesday.  I think he knows (he is, after all, a former long-time NCUA offical), 
but for obvious reasons didn't want to say, that there exists a strong 
possibility that NCUA will shut DCU down temporarily.

					-- Roger

Re:  .45

Shut down DCU temorarily?  I hardly think this likely.  What's more,
I think it highly unlikely that the current BoD would not have
stated or speculated this themselves had they thought that this would
happen.  

IMO (which is quite simplistic), there just would be *NO* reason
for shutting down DCU because their is not BoD for a few months.

Collis

�Auditors notes with annual reports:  many CUs have never included them.
    
    Come to think of it, two other credit unions I do/have belonged to
    haven't even sent me an annual report that I can remember.

>                                       <<< Note 339.41 by STAR::BANKS "Lady Hacker, P.I." >>>
>
>Although I personally slung a few barbed questions myself, I'd have to say
>that I was favorably impressed by Chuck.  This is not to say that he
>answered everything he was asked.  There still seemed like a couple of
>things he dodged.  The 8% number was a prime example.

    We all know where you will be working next!!!
    
    	- mark
    

There was one other exchange which merits reporting.  Chuck was asked about
the now-famous quotes, wherein Mark Steinkrauss declared that DCU does not
invest in speculative instruments at precisely a time when we were sinking
money in Cape Cod real estate, and wherein Susan Shapiro declared that DCU's
performance was on target at precisely a time when the Cape Cod loans had
begun to default.

Chuck began with something like a smile and words like "You're not going to
believe me..." and indicated that it's customary for Board-member statements
to be written by paid management [Mangone] and merely signed off by Board
members.

That interpretation was challenged, and it was said that Susan Shapiro, when
later asked about her statement, claimed to have written it herself and
declared that she stood by it.

Chuck then said that if those were the facts, he didn't think the Board
members should have made those statements.

My impression is that Chuck's reactions were genuine.  I wouldn't read too
much into his answers.  He may well have not researched possible
iconsistencies in things his bosses have said over the years, and no
one in his position could or should condemn his bosses in any case.  What's
important  (to this observer) is that it seemed he WOULDN'T blindly defend
his bosses IF they had really done dumb things.  It's also clear that he
holds them in higher regard (as he must and should) than do a number of
us shareholders, and therefore would have to be more reluctant than
shareholders to suspect them of dumb things.

	Re: .39

>	Chuck said that what the DCU was doing was no more than what
>	the government does    ...

	If he wants the DCU to be a service-oriented group, he sure has picked
an odd customer-service metric to benchmark DCU against...

							-c

	As Bill mentioned, there was no shortage of discussion, and
	often one question led to many others. Chuck did a pretty
	fair job of allowing everyone to ask question, and while
	some folks had more questions than others, I don't think
	anyone dominated the meeting.

	That said, one question I didn't get a chance to ask
	regarded bringing the capital/asset ratio from 4.2% to
	8%. Chuck stated that it had taken the DCU something 
	like 11 years to build up the ratio to 4.2%. He wants
	it to grow to 8% but he didn't state over what period of
	time he wants to accomplish this. 

					Tom_K

.45>  Only once did I feel that Chuck was being less than candid with us.
.45>  That was when he stated that he didn't know what NCUA would do if we
.45>  vote the BoD out on Tuesday.  I think he knows (he is, after all, a
.45>  former long-time NCUA offical), but for obvious reasons didn't want to
.45>  say, that there exists a strong possibility that NCUA will shut DCU
.45>  down temporarily.


My impression was certainly that Chuck treated this question gingerly.  But
as I remember, the questioner asked only, How smoothly can DCU be kept running
if we vote out the Board?  I don't remember that the questioner mentioned
NCUA.  It was Chuck who made NCUA part of his answer.  (Anyone else with a
clearer memory?)

In any case, I would NOT ascribe to Chuck any intimation that DCU would be
shut down.  He said only that NCUA would probably do something to create
an interim Board, that they would not want DCU without a Board.  NCUA would
have every reason to not shut down DCU.  Try to imagine their position.

What I WOULD surmise is that for obvious reasons he didn't want to say:

    NCUA may do some pro-forma things, but in actuality DCU will
    have no trouble runninq quite smoothly for the duration, thank you.

(My opinion only!  Chuck did NOT say this!)

.44>   Chuck said he would be fired for discussing a member's financials.

After the meeting I asked Chuck if he wanted to review my notes on his
answers to the "tough questionnaire".  He said "go with it".

But then he specifically reminded me that he had refused to discuss any
numbers having to do with any member's account, and asked me to be sure not
to say anything to the contrary.  (So for the record, here's the report:
Chuck did not say anything about any member's financials.)

The relevance -- in my opinion, Chuck was being genuine in his concern over
not revealing account data which he must not reveal.  Perhaps we have not yet
found a way to ask a question which can be legally answered, and the question
of the Mangone loan is certainly not answered yet, but there had been some
speculation earlier that Chuck was stonewalling on the subject.  To me, he
appeared genuine in his reactions today.  FWIW...

    I'll continue to support Chuck. My bet is that everytime he meets with
    the BOD they tell him mean things about the membership. What the BOD
    should be doing at this time is representing the membership fairly
    and giving Chuck good information. But my guess is the BOD have other
    things on their mind right now.
    
    I am pleased that Chuck won't answer any question related to a
    financial statement that actually has a members name on it. The way
    to ask this question is to concoct some numbers. Very clearly point out
    these are made up numbers and ask him how (if at all) the interest rate
    can be deduced from these numbers. If he has any sense at all he won't
    answer with something like "What's the point of answering a
    hyperthetical question".
    
    This whole Mangone Statement thing is a rathole. I think Chuck is just
    trying to make triply sure that nobody can turn around and say
    something like. "The DCU president talked about a particular members
    account, I think he is invading privacy" etc.
    
    I think Bill Sconce has come close to the correct way of asking the
    question. But I bet you partial interest payment is the right answer.
    
    Dave

.54>          -< Keep on supporting Chuck, the BOD is the problem >-

Right, IMO.

It occurred to me during Chuck's meeting today (when he was defending the
"information protection policy") that he might well have thought up the idea
of the IPP.  The fact that such an idea would ignite a flamewar of protest
and disgust in Digital's culture would be something that no one who was not
familiar with DEC could be fully able to appreciate.

Chuck was new here.

But the Board was not.  And in failing to give their new CEO critically-needed
advice and direction about Digital, the Board would (again) have failed to
meet their responsibilities, if only because they were so totally out of touch
with the shareholders.  And regardless of why Chuck supported the idea (as it
appears he did, and still does), there might be hope he could learn.  We might
still be able to eventually support him.

In the Board's case there is no excuse.

Chuck and Mark invited me and a few others to a meeting on October 28th,
where the subject came up of what happens if the Board is removed.  I'm
sure that Chuck did not raise the possibility that the DCU would be shut
down if we had no Board.  The following is what I remember [and speculate]
about what he did say.

What he said was that the NCUA wouldn't allow the DCU to run without a
Board, because there are some things that the Board has to approve on
a regular basis.  [I got the impression that some kinds of reports and
financial transfers need to be signed off by the Board.  That makes me
wonder how Mangone was able to transfer $3.5M to BCCU with the Board no
wiser, but I didn't ask about that at this meeting.]

Chuck suggested that the NCUA would commonly consider having the
Supervisory Committee take over the Board's role in such a situation,
but that they may not wish to do that here since the Supervisory
Committee is new.  [There was, in effect, no such committee for many
years, and I'm not sure whether the new one was even complete yet as
of october 28th.]  

Chuck said emphatically that his program to change DCU policies and
improve the credit union required a Board, and that he doesn't want
to lose even two weeks of time.  [My personal feeling is that he'll
be much more effective in the long run with a Board in place that has
the confidence of the membership and that agrees with Chuck that the
members are the OWNERS of the DCU.  Mark Steinkrauss told me in person
that he does not consider the members to be the owners of the DCU.]

	Enjoy,
	Larry

PS -- About other CU's that don't send out annual reports.  The question
is not whether they send them out unsolicited.  The question is whether
they would refuse to provide them if a member requests one.  Chuck said
that at Rockwell they for many years didn't even prepare an annual
report, *but* he referred to making copies of the work sheets with
operating figures and distributing that.  The substance is what counts.
Chuck is resisting a lot of information requests relating to before he
got here, but he seems to agree that people should from now on be able 
to see the sorts of information that has been requested.

    It occurs to me that the reason for the clash between
    Deccie/shareholders and with the NCUA/DCU Board/Chuck has a simple
    reason.  It is that in order to survive in the business, DEC is
    (slowly) learning to be PROACTIVE.  We are hammering in thoughts about
    how we need to become best in class, best in quality, leaders in
    industry and that sort of thing.  But, those in the banking industry tend 
    to be REACTIVE.  For example, the NCUA tends to be "hands off" until a CU
    has difficulty.  Another example is that we are comforted about DCU by
    the REACTIVE solution to problems at the institution - our money is
    insured.  But, we are only comforted about Digital by the PROACTIVE
    solutions - new products, new ideas, new opportunities.
    
    The problem may be that the "dissidents" are thinking in PROACTIVE terms
    and the DCU folks are thinking in REACTIVE terms.
    
    What some of the previous notes seem to indicate is that Chuck came in 
    accustomed thinking REACTIVELY to a situation, hence the IPP, if it was 
    by his design.  It certainly has his endoresment.  The IPP, the "choices" 
    brochure and possibly other decisions have been REACTIVE in that they are 
    steps taken in reaction to past problems.  
    
    But, the Special Meeting is a PROACTIVE solution.  It is designed to 
    prevent future problems by creating a fresh start for the Board and
    rendering control to shareholders.  I think that people who think in 
    REACTIVE terms think of the Special Meeting as a REACTIVE event or as an 
    act of retaliation for past deeds.  Hence accusations of lynching and 
    witchhunting.  But, folks who think in PROACTIVE terms think of the 
    Special Meeting as an opportunity to give the DCU a fresh start.
    
    If the Special Meeting were a REACTIVE event, I think we would have
    seen some effort being made to ban the Board members from the Board,
    impose some form of punishment for each member or to thrust individual
    members into shame.  But, that is not the case.  The agend items do not
    name Board members by name or in any way attempt to address them
    individually.  It does not ban them from participation in the election
    process.  In fact, it is entirely possible that after a special
    election all Board members might be reinstated and the intents of the
    Special Meeting agenda will have succeeded because the Board will have
    been given its fresh start and the shareholders will have reaffirmed
    their control over DCU!  Even if none of the agenda items pass, it will
    still have been established that the shareholders are in control IF
    many attend, hear and try to do "the right thing".  So, even in
    "losing", the attempts of those like myself who view the Special
    Meeting as a PROACTIVE event will feel that it is a success.
    
    Those who think in REACTIVE terms will probably feel that the Special
    Meeting will be a disaster whatever happens.  Because, they do not see
    the need for the meeting, they do not feel there is need for a "fresh
    start" for the Board, and they do not understand the need for
    shareholders to be in control as is designed in the bylaws.
    
    So, what type of viewpoint do "you" have?  Are you PROACTIVE or
    REACTIVE?
    
    Mr. Moderator, these thoughts are stimulated by the current discussion.
    But, feel free to move it to someplace more appropriate.  Thanks!
    
    Steve

>> 1. He persists in blaming the BoD recall drive on "a small group of 
>> troublemakers," not understanding that the small group whose voices he has 
    
    I would feel much more encouraged if he characterized those who
    support the recall drive as "a small group of concerned and well-
    intentioned but misguided shareholders."  If he used those words,
    I'd think he was at least attributing the proper motives to the 
    effort.  Characterizing the group as "troublemakers" completely
    misses the point of why all this is happening.  I don't believe
    anybody is doing this for the fun of it.  It's his job (and the
    BoD's job) to take shareholder concerns seriously, not to dismiss
    upset shareholders as "troublemakers" (and therefore not worthy of
    serious consideration).
    
    I'd also feel more encouraged if he omitted the word "small," as
    I think that misrepresents the effort as well, but that is only
    a question of relative size, not motive.

    
    Re: Chuck's meeting at ZKO
    
    I was impressed with what I saw but had to leave before seeing
    a resolution to one thing that concerned me.
    
    In the context of his discussion about the "changes" brochure,
    the fees, etc., he listed several things which he believed
    were done wrong.  He specifically did not mention anything with
    regard to addressing the wishes of the membership.  I questioned
    him about it, and he referred to the example flipchart showing
    where his options lie in balancing income and expenses and
    remarked how with certain "products", I think that is the word he
    used, there is some number of accounts that are "unprofitable"
    and that the membership at large is subsidizing those.  Now
    here is the point, in the context of having been queried about
    what the membership wants, he specifically stated that he
    personally did not think that was right.  Bill Sconce at
    just about this point echoed what I asked, i.e. what about what
    the membership wants?
    
    I had to leave before I felt that was resolved.  I was concerned
    that there might be some conflict there between his convictions
    and the wishes of the membership.  Was there any clear resolution?
    Did he every directly address the question about the wishes of
    the membership with respect to how he might choose to balance
    income and expenses?
    
    Steve
    
    

.59>      I had to leave before I felt that was resolved.  I was concerned
.59>      that there might be some conflict there between his convictions
.59>      and the wishes of the membership.  Was there any clear resolution?
.59>      Did he every directly address the question about the wishes of
.59>      the membership with respect to how he might choose to balance
.59>      income and expenses?


No.  He did not directly address that question.  Considering that he seemed
to be very fond of certain aspects of his presentation (e.g., "profitability"
of certain products;  the 8% capital ratio), my impression is that he would
sense a conflict between his own goals for the CU and any goals held by the
membership which differed from his.

He WAS unequivocal, however, that "the owners of DCU are the members".  My
personal hope would be that if the membership gave him a clear, consistent,
and persistent set of goals that WE want, he'd come around in spite of his
personal preferences.  (This is giving him the benefit of a doubt -- I'd
expect any process which necessitates changing one's personal beliefs to take
time, and we'd just have to keep working on him and see.)

What is clear (to me) is that no matter what the membership tells him, if
the Board is telling him something different (let alone something which more
nearly matches his own preferences to begin with), it's the Board which will
prevail, and the membership will be ignored.

(This is, actually, how things are "supposed" to work.  The staff DOES report
to and take work direction from the Board, and not the membership directly.
The membership's ultimate method of control is to make sure the Board
represents the owners.  I.e., by elections.)

(And by Special Meetings, when it comes to that.)

    
    Re: .60
    
    Thanks, Bill.  I can live with that for now, but ultimately Chuck
    and the BoD present and future are going to have to reckon with
    this issue.  I think if we were to summarize the entire impetus
    for the Special Meeting it would fall into the general category
    of the membership making it perfectly clear who owns the DCU
    and whose will *WILL* prevail.
    
    Steve
    
    

A member of my group spoke with the NCUA's general counsel today.  Apparently
counsel stated that NCUA would most likely turn the Supervisory Committee into 
a temporary BoD in the event the current BoD is recalled.  Therefore it seems
unlikely that NCUA will shut DCU down temporarily, as I suggested in .45.

					-- Roger

    RE: .14  by JUPITR::BOYAN 
    
    Question to Mr. Cockburn at the SHR meeting:
    
    	"Could you please review the need for the 
    	Information Protection Policy?"  
    
    I assume this question was in regard to the DCU's refusal to share
    information.  Perhaps someone needs to appraise Mr. Cockburn of
    _Digital's_ Information Protection Policy.  In his remarks to the
    meeting the other night, he stated that he had monitored VAXNOTES
    discussions of the issues.  He is not an employee of Digital Equipment
    Corporation.  He should be asked to explain how he is acquiring this
    internal use only information.  If he has been given copies, or has
    been allowed access to this or any other VAXNOTES conference, somebody
    is in violation of company policy.
    

>    I assume this question was in regard to the DCU's refusal to share
>    information.  Perhaps someone needs to appraise Mr. Cockburn of
>    _Digital's_ Information Protection Policy.  In his remarks to the
>    meeting the other night, he stated that he had monitored VAXNOTES
>    discussions of the issues.  He is not an employee of Digital Equipment
>    Corporation.  He should be asked to explain how he is acquiring this
>    internal use only information.  If he has been given copies, or has
>    been allowed access to this or any other VAXNOTES conference, somebody
>    is in violation of company policy.

Then, in this particular case, Digital's policy is clearly absurd. This
notesfiles contains, among other things, comments about how well he is doing
his job. He should not only have the right to see these comments, he should
have the right to participate in this notesfile (as should any DCU employee).

It is certainly possible to set up a gateway machine hosting this notesfile,
in a way that protects both DCUs and DECs business interests.

					I

    
    RE: .63
    
    I know for a fact that Mr. Cockburn was given a copy of one of my
    mailings because Mr. Ayres received a complaint from Mr. Cockburn on
    some of the statements (Mangone loan of course).  When I asked Mr.
    Ayres how he got the mail he seemed to shrug it off yet he then
    proceeded to question my use of company assets to issue the message. 
    Figure that one...
    

>    Ayres how he got the mail he seemed to shrug it off yet he then
>    proceeded to question my use of company assets to issue the message. 

	DCU is a company benefit. Why is use of company assets in
	maximizing utility of a company benefit a problem?

					Tom_K    

    
    RE: .66
    
    HEY!  Were you tapped into my phone conversation?!  ;-)
    
    
    
    Yes, I raised these very issues, including DCU use of LiveWire, DTW,
    DTN phone system, responding in DCU conference, etc.  I was also glad
    to see Ilene Jacobs confirm that DCU was indeed considering a fringe
    benefit.  Just working to keep our benefits working for us and not
    against us...
    

    
    Well, if that is true, then Dan Infante (VP & BoD member) could very 
    easily grant it if he so desired.  Then again, with all the VP 
    connections and access of the BoD, I don't think they would have much 
    trouble getting this done.

    Chuck is good.  He is all plays hardball on behalf of the Board.  I
    expect to fight just as hard with a new Board.  He's paid to play
    hardball.
    
    Steve