Dissident members of Columbia Credit Union asked a state court here last week to enforce their petition seeking a special membership meeting where they hope to recall the board of the prospective credit union convert.
The move came four days after state regulators backed off their earlier pledge to enforce the rare petition, signed by 3,600 members of the $620-million credit union, the largest credit union to vote on a conversion to mutual savings bank.
"There's a lot of issues that need to be discussed by members of Columbia Credit Union," stated Lloyd Marbet, one of the organizers of the petition drive, who said his group, Save Columbia CU, would still like to recall the credit union board even after the plan to convert to a bank was scrapped.
Members of the group had been counting on the state's Department of Financial Institutions to enforce the petition after it issued a letter to Columbia last month validating the petition and directing the credit union to hold the special meeting. The state regulator issued several warnings to the credit union since then of a civil administrative action to enforce the special meeting if the credit union did not do so on its own.
But in an about-face, the DFI agreed to let credit union officials and directors off the hook in exchange for a deal to allow the dissidents an opportunity to run a slate for a minority of the board's nine seats at this spring's annual meeting. Under the deal, the credit union agreed to delay the annual meeting from March 16 until April 27 and to extend the period for nominating candidates to allow Save Columbia CU to run a slate.
Scott Kinney, a spokesperson for the DFI, said the department believed the settlement was in the best interests of both the credit union and its members.
"Our goal in this process was to achieve a settlement that benefits all members of the credit union-not just the board or the petitioning group," said Helen Howell, director of the DFI. "We have devoted many staff hours to reaching a fair resolution. In the end, we are pleased that we could facilitate an agreement that will allow the membership to be heard at Columbia's upcoming annual meeting."
Not Satisfied With Deal
But the dissident members were not satisfied with the deal, which was negotiated with little of their input. Even though the credit union board had indicated its willingness to halt its conversion efforts, one of the main aims of the special meeting, they still want a chance to have the directors answer for their actions. "They need to be held accountable for how they handled the whole thing," said Steve Straub, one of the leaders of the dissident group and the former CEO of Columbia.
Among the issues they want reviewed at a special meeting are allegations of improprieties and illegalities uncovered by NCUA during a 10-week review of last fall's conversion vote.
The federal regulator found that the vote, which passed by a narrow margin, was carefully set to favor the conversion and that management mislead voting members about plans to eventually sell the credit union to the public in an initial public stock offering.
"The credit union has said a lot of things. We don't know what's true and what's not," said Marbet.
Marbet's group, the Oregon Conservancy Foundation, which has a $1 million endowment from civil litigation settlement last year, will pay attorneys fees in the suit, he said.
In its petition to the Clark County Superior Court, the dissidents asked that the court order the credit union to enforce its bylaws, which require that a special membership meeting be held upon request by 2,000 petitioning members, and for the DFI to enforce state laws allowing for a special meeting upon a valid member petition.
A hearing in the case is scheduled for Feb. 25.
