CHARLES CITY, Iowa-Three days after all five employees of Family Community CU's main office walked out the door and quit, members attempted to vote out the board and the CEO during the annual meeting.
It was an apparent show of support from the membership for the employees, who sources indicated had issues with how the new CEO was managing them. But the members' moves were overturned in just over a day by the state regulator, who ruled that the actions taken by the members at the meeting were illegal.
According to accounts from those who were present, during an emotionally charged annual meeting members shouted at board members and broke down in tears, not only voting to dismiss Family Community's board of directors and suspend CEO Dawn Swaningson, but also to reinstate staff who had walked off the job and appoint a new board and CEO.
The $20-million FCCU has 4,120 members and reported net income of $32,000 at year-end 2012.
JoAnn Johnson, Iowa's Superintendent of Credit Unions, restated to Credit Union Journal what she shared in a letter to the credit union last week: "A majority of members present at any meeting may vote to modify, amend, or reverse any act of the board of directors or instruct the board to take action not inconsistent with the articles, bylaws, or (chapter 533.203A of Iowa Code). However, a motion to dismiss the board of directors is not a motion to modify, amend, or reverse an act of the board of directors, nor is it a motion to instruct the board to take a particular action. Even if it were such a motion, the Code provides that in order to be binding upon the board of directors, the motion must be put to a vote of all eligible members, not just the members in attendance at a particular meeting."
Surprised By Developments
Johnson, a former NCUA chairman, acknowledged she was stunned to learn of the events, and had never previously seen such action taken by a membership. Johnson said she received calls from the Iowa league and Swaningson the day after the member vote, and that in response her office got to work immediately.
"We needed to work carefully through the bylaws in the Iowa Code and the CU's bylaws."
Swaningson assumed the CEO role just over two months ago. Andrea Webster, an FCCU senior loan officer since 2007 and the first to walk out, alleged working conditions deteriorated quickly after Swaningson took over for former CEO Michael Schear, who retired last year.
"After an initial meeting (when Swaningson came on board) there was absolutely no communication from the CEO to the staff," Webster told Credit Union Journal, citing that issue as the main reason staff walked out. "I was to the point where I was so stressed I was feeling sick and getting non-stop migraines. I quit and handed (Swaningson) my keys. It was more than frustrating there. We tried to find out the reasons for the situation-we asked, but got no answers."
'Not Getting Answers'
Webster alleged that when staff had questions about a task, they were often left to "guess" or "figure things out on our own. We were told not to contact the CEO directly but to work through our supervisor, who would get the answers." But Webster said that process was not effective, adding that the supervisor left the Wednesday before the annual meeting, as well.
Former CEO Schear, shown on a TV report from local TV station KIMT, stood up at the annual meeting and said he worked with the staff who quit "for years and their hearts are for the members and the credit union. I was not at the credit union (the last few months) to know what was going on, but these are not the kind of people to walk out on a whim."
Webster said she is moving on, and will not return to work at the credit union if an opportunity were to be presented as long as the current CEO and board are in place. "I am choosing my family and my health over working there."
Webster expressed dissatisfaction with what she alleged was the board's inaction after they were informed of the staff's problems in early February.
In the KIMT report, at the annual meeting member Ashley Jacobi stated the CEO and the board also failed to answer questions from members during the meeting about the employees' complaints.
Despite the troubles, the credit union never closed its doors, not after the employee walkout nor after the annual meeting. According to sources, the Iowa CU League helped to coordinate temporary help so there would be no interruptions to service.
Swansingson declined to comment when contacted by Credit Union Journal. Instead, Family Community CU's board released a prepared statement that said, "Family Community Credit Union remains committed to providing exceptional service to our members. The credit union's daily operations are continuing as usual. To preserve the privacy entitled to those involved, we are not legally authorized to comment on the details of employment for specific individuals.
'Confident In CEO'
"At Saturday's annual meeting, we conducted the credit union's business as laid out in the bylaws of our organization. All concerns brought to the board's attention are being taken seriously and reviewed. The board will take any appropriate action necessary to address the concerns.
"FCCU's board is confident in Dawn Swaningson's ability to lead the credit union in the best interests of our members. We look forward to continuing serving our members' financial needs while providing exceptional member service."
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