Candidate Seeking To Run For Community CU Board Finds Tough Challenge

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A Community CU member who tried to run for the credit union's board said his bid was blocked by a CCU requirement tantamount to an identity theft nightmare.

Joe Arnold, a six-year member of CCU and a Southwest Corporate employee, said he just wanted to give something back to the credit union and get more involved in the credit union community, but one of the hoops he was asked to jump made it all but impossible for him to run, he told The Credit Union Journal.

"They had already closed the nomination process, so I was going to have to run via petition," related Arnold, who is now a member of the Coalition for Member Trust that is opposing Community CU's conversion attempt. "But I had been thinking about running for the board even before there was any inkling about the conversion."

When Arnold contacted Community CU CEO Gary Base about running for the board, Base consulted the credit union's attorneys. "I was contacted by their outside attorney and was told I was disqualified due to a conflict of interest arising from my employment with Southwest Corporate," he explained. "But I work in Southwest's investment services, and Community is not a customer of mine or any of the other advisors in my group. And I had asked permission from Southwest Corporate to do this and was told that what I did on my own time was my business."

'Demanding The Petition Form'

Undeterred by this first hoop, Arnold said he pointed out to the attorney that CCU's own rules state that any member can run via petition so long as the would-be candidate is at least 18 years old, has no criminal convictions and is a primary member of the credit union. "I fit all those qualifications," Arnold said. "I had to demand the petition form, but they finally sent it out to me."

And that's where the real surprise came in, he said.

"The petition form requires name, address, signature and the member's account number," Arnold offered. "I was astounded. First of all, it's pretty unreasonable to expect that anyone trying to run via petition is going to be able to get 200 credit union members, in this day and age, to give out their account numbers. And secondly, I couldn't believe the credit union would even want anyone out there soliciting that information."

Arnold said he contacted the credit union to suggest it consider using some other means of member verification and was told no other method would be considered.

"I called the Texas Credit Union Department to ask about this, and they said that while they'd rather a credit union use some other method of validation, it's perfectly legal for them to do it this way," he commented. "At that point I pretty much knew I wasn't going to get the 200 signatures necessary for me to run for the board."

When Arnold e-mailed the state regulator about the situation, his complaint was forwarded on to CCU. Although Arnold e-mailed the regulator from his home on a Sunday night, he had used his Southwest Corporate e-mail address, which proved to be a problem.

"Gary Base called [Southwest Corporate CEO] Francis [Lee] and suggested it was wrong for Southwest Corporate to be opposing his credit union's conversion," he alleged. "I was able to show that I had not intended this to be considered something coming from Southwest Corporate and that I was doing this all on my own time."

Base did not return phone calls seeking comment.

Arnold, whose wife has belonged to CCU since she was 9 years old, said that although he had wanted to run for the board even before the news that the $1.4-billion CU intended to convert to a bank charter, he was even more convinced that he should do it after the announcement. "When they announced their intent to merge, I realized that board obviously lacks representation with the members' best interests in mind," he said.

It wasn't long after that that Arnold heard about the Coalition for Member Trust and quickly joined the cause. "Typically, I am not an activist, and I don't like to get into fights I can't win, and this is definitely going to be an uphill battle. But I just feel compelled to get involved because the average credit union member doesn't know what they're being asked to give up," said Arnold, who is no relation to CMT's spokesperson, Mark Arnold. "In my mind, it is because I work in the industry and because I have the understanding and the know-how that it is my obligation to step up to the plate."

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