CANTON, Ohio SMHA Credit Union has filed a lawsuit against the Stark Metropolitan Housing Authority, which helped to create the credit union more than a decade ago.
The credit union has filed suit in Stark County Common Pleas Court alleging that the Housing Authority has improperly attempted to recoup $2 million allocated to the credit union since it was founded, has improperly withheld $100,000 in promised subsidies, and now is threatening a rent increase that could lead to the credit union’s eviction.
The Canton Repository reported the disagreement follows an audit by the U.S. Department of Housing and Urban Development Office of Inspector General that concluded SMHA had wrongly put $10.5 million in public housing funds toward projects that did not provide public housing opportunities, including providing financing to SMHA Credit Union.
In its lawsuit, SMAHCU is alleging that the Housing Authority’s demand for $2 million in repayment has interfered with efforts to merge the CU with another credit union, according to the Repository, which quoted SMHA Executive Director Herman L. Hill as saying in a written response, “The (Inspector General) ... concluded that SMHA must discontinue its use of federal funds for ineligible activities and reimburse its operating fund. The financial commitments of former executive directors are void and unenforceable, because they didn't have the authority to use public housing funds for ineligible activities.”
