CCU Conversion Opponents Win Control Of Board Of Directors
In a display of credit union democracy, opponents of the controversial conversion attempt by Columbia Credit Union to a mutual savings bank finally won control of the credit union's board last month after a two-year struggle.
The self-styled Save Columbia CU group had won four seats on the nine-member panel last September and won three more in this year's election, giving it a majority of the directors' seats. Among those ousted in last month's vote was Dale Majers, the chairman of the board and one of the board's last supporters of the failed conversion bid.
Majers joins former Columbia CU Chairman Karen Martel and former CEO David Doss, who helped engineer the failed conversion, among those departing amidst the still-festering controversy. Martel retired from the board this year rather than face reelection, and Doss left this spring to take a job as president of Arizona State Savings and Credit Union.
Among those winning last month's election to the board were Cathryn Chudy, one of the organizers of Save CCU, and John Cheeks, another member of the anti-conversion group. Also elected were Kathryn Edgecomb and Emmy Winterburn, both of Save CCU. Winterburn was elected last year to a one-year term.
The most recognized name elected to the board last year was Steve Straub, former CEO of the credit union, who helped engineer the member uprising.
"This was a clear victory for those candidates who were on record as opposing the conversion and to the (incumbent board's) flaunting of corporate governance," said Doug Schafer, an attorney for Save CCU, who has been fighting in the courts for almost two years to gain access to credit union records detailing the actions and expenses associated with the failed conversion.
At the credit union's June 29 annual meeting, where the board vote was disclosed, it was finally revealed that the credit union's long-time directors-none of whom had faced an election in more than 20 years-spent almost $1.3 million of the credit union's money in fees and expenses, first on the failed conversion, then on their own defense against the unprecedented member revolt over the bid. Among the expenses was more than $412,000 to hold a special meeting after NCUA invalidated the conversion vote where angry members tried to recall the eight sitting directors who voted for the conversion. The directors narrowly survived that meeting with the help of an expensive advertising and marketing campaign paid for by the credit union.
Vote Is Overturned
Members barely approved the conversion to mutual savings bank in an October 2003 vote by a 52% vote. However, NCUA overturned the ballot after discovering the vote was manipulated by the credit union. Then, as they faced recall by an angry membership, the board abandoned the conversion attempt.
In a somewhat Orwellian twist to the continuing saga, high-priced lawyers representing the credit union continue to fight a suit by Save CCU to gain access to records associated with the conversion. The defense of the suit, which lists the individual directors as plaintiffs, is apparently being paid for by the credit union's insurer, CUNA Mutual Group, under its directors and officers liability policy.