Insurgent members of Columbia CU who successfully fought off a bid to convert the credit union to a saving bank three years ago were dealt a setback by a state appeals court which ruled the members had no right to sue directors. The three-judge panel ruled that the state credit union statute "does not expressly grant credit union members the right to assert a direct claim against a director for breaching a fiduciary duty," the Washington Court of Appeals said in its 10-page ruling, obtained by The Credit Union Journal.
In fact, "the extensive regulatory oversight that the legislature provides for credit unions suggests that the legislature did not intend for individual members to bring actions against a credit union's directors; rather, the legislature contemplated that the (state regulator) would protect the members' interests," ruled the judges. Dissident members of the $700-million credit union had sued the credit union and the board of directors over the failed conversion, claiming the directors had violated their fiduciary duty to members by pursuing the switch to bank. They also sought access to all records and minutes of meetings related to the ill-fated conversion. But two of the three judges on the appeals court ruled that members have no right to access to the records.
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