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BUREAU OF FINANCIAL INSTITUTIONS
Department of Professional and Financial Regulation
State of Maine
ORDER APPROVING APPLICATION OF
DOWN EAST FEDERAL CREDIT UNION
TO CONVERT TO A STATE-CHARTERED CREDIT UNION
WITH THE NAME OF DOWN EAST CREDIT UNION
Down East Federal Credit Union, Baileyville, Maine ("Down East
FCU") applied to the Superintendent of the Maine Bureau of Financial
Institutions ("the Superintendent"), pursuant to 9-B M.R.S.A.
Chapter 87, to convert to a state-chartered credit union with the name
Down East Credit Union ("Down East CU") and to merge Capital
Area Federal Credit Union, Augusta, Maine ("CAFCU") with and
into Down East CU. Down East CU also filed a bylaw amendment notice
to amend its field of membership to include persons who live, work,
worship or attend school in Washington, Hancock, Penobscot, Waldo, Lincoln
and Kennebec Counties, Maine. The requested field of membership would
have combined the existing fields of membership of Down East CU and
Capital Area FCU.
The application was accepted for processing on June 7, 2006. Public
notice, as required by Title 9-B M.R.S.A. 252.2(B), was provided by
publication, posting on the Bureau's website and e-mail to interested
parties affording them an opportunity to either submit written comments
or request a hearing. No comments were received by the Bureau during
the public comment period which ended July 12, 2006. On August 7, 2006,
DEFCU withdrew the application to merge with CAFCU and on August 9,
2006 the Bureau provided notice to interested parties of the application
withdrawal; the notice of withdrawal was published in local newspapers
on August 17 and August 18, 2006. Processing of the application was
suspended, at the applicant's request, on September 11, 2006, for a
time period not to exceed thirty days.
A Principal Bank Examiner of the Maine Bureau of Financial Institutions
conducted an investigation of this transaction. All evidence and pertinent
material that were considered by the Examiner were also considered by
the Superintendent in reaching his decision.
Down East FCU (originally known as St. Croix Federal Credit Union)
was established in 1941 to serve the employees of St. Croix Pulp and
Paper Company. In 1996 its field of membership was expanded to include
Washington County and, in 2004, its field of membership was expanded
to add Hancock, Penobscot and Waldo Counties. Its field of membership
currently consists of persons who live, work, worship or attend school
in, and businesses and other legal entities located in Washington, Hancock,
Penobscot or Waldo Counties.
The financial and managerial resources of Down East FCU are satisfactory.
The credit union, which operates four branch offices in Machias, Unity,
Belfast and Bangor, has assets of $50 million with adequate capital
and earnings. Inasmuch as there are no material differences between
the powers of a federal credit union and a Maine-chartered credit union,
the conversion to state-charter will have no effect on the competitive
abilities and future prospects of Down East FCU, both of which are considered
satisfactory. Similarly, the conversion will have no effect on convenience
and needs nor will it have any effect on competing financial institutions.
Accordingly, the conversion of Down East Federal Credit Union to a state-chartered
credit union with the name "Down East Credit Union" is approved.
The conversion shall be completed within one year of the effective
date of this Order, unless a written extension is granted by the Superintendent.
The field of membership amendment to the bylaws of Down East CU is also
Any person aggrieved by this Order shall be entitled to a judicial
review of the Order in accordance with the Maine Administrative Procedure
Act, Title 5, Chapter 375, subchapter VII.
By order of the Superintendent, effective November 10, 2006.
Lloyd P. LaFountain III
October 11, 2006