Columbia CU: 'Members Depositors, Not Owners'
The ongoing legal battle in the wake of the attempted conversion of Columbia Credit Union to a mutual savings bank took a new turn recently, as attorneys for the credit union asserted members are merely depositors-not owners-and therefore have no standing to claim a breach of fiduciary duty by the CU's board of directors.
A hearing on the matter took place before Clark County Superior Court Judge Roger A. Bennett. At issue is a lawsuit filed by a group calling itself "Save Columbia CU Committee" that alleges board members at the credit union are in violation of term limts.
Douglas Schafer, the attorney for Save Columbia, told The Credit Union Journal that the Washington Credit Union Act defines credit unions as a cooperative society organized as a non-profit corporation.
"In contrast to that, attorneys for Columbia are arguing members are depositors with no ownership rights," said Schafer. "Everything in this case has asserted members in a credit union are comparable to shareholders in a corporation. When Columbia attempted to convert to a mutual savings bank last year, the disclosure it sent to members said the board of directors has a fiduciary duty to the credit union and its members."
Attorneys for Columbia CU were not available for comment.