Bank-to-credit-union conversions rarely come to a neat conclusion with all parties satisfied, but the case of First Basin CU has devolved into a slow-moving lawsuit.
In July, the credit union filed suit alleging opponents of its charter switch illegally interfered in the process. One of the defendants named in the suit was The National Center for Member Trust. Jim Blaine, CEO of State Employees' Credit Union in Raleigh, N.C., and a founding volunteer of the National Center for Member Trust, told Credit Union Journal the case "doesn't seem to have much momentum at this point."
"The credit union asked for documents two or three months ago," he said. "I was supposed to give a deposition, but it has been pushed back twice and now is scheduled for February. Tentatively February. It is like watching paint dry."
In 2007, First Basin announced plans to convert to a bank. In 2008, it said it was dropping the conversion bid, but it is still pursuing the litigation.
Karen Howard-Winters is still a member of First Basin CU, but it does not mean she is happy. Howard-Winters alleged numerous improprieties with the election of board members at the CU's annual meeting in April.
Howard-Winters joined First Basin CU in 2000. Following the April 15 meeting, during which three incumbent board members-including credit union President and CEO Shem Culpepper-were re-elected, Howard-Winters outlined her concerns in a letter to Harold Feeney, commissioner of the Texas CU Department in Austin, with copies sent to Texas Gov. Rick Perry and other state and national representatives.
Howard-Winters told Credit Union Journal she received exactly two responses: a letter from U.S. Sen. John Cornyn (R-TX), who said he would keep an eye on the issue, and a lengthy reply from Feeney, which acknowledged "some minor aberrations in the conduct of the annual meeting" but concluded "the election was conducted in accordance with the bylaws and applicable state laws and rules."
"I am very disappointed with lack of response from politicos," said Howard-Winters.
Officials from First Basin did not return telephone calls seeking comment.
Another source of Howard-Winters' ill feeling is First Basin's board. She reported the board states it no longer is entertaining movement toward a conversion, yet the board members who sought to change the CU to a bank remain in place.
"They fought so hard to keep the board that wanted a conversion in the first place. We haven't gotten around to another year yet, but there will be more coming up for re-election in 2009. People who are opposed to the conversion are asking why it is so important to Culpepper to keep the board intact?
"What really gets me is I only got two responses, and I never heard back from my other legislators," she continued. "I am disappointed that no one from the Texas Credit Union Department board replied. The board is supposed to be watching over us, and I don't think they are doing their job."
Asked if she would be angry enough to leave First Basin, Howard-Winters replied: "It's my credit union. I was here first. So no, I'm not leaving."
Originally Reported In CU Journal: June 29, 2007
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