Three-Year Conversion Odyssey Takes aTurn
COLUMBIA, Wash. - (07/26/06) Insurgent members of ColumbiaCU who successfully fought off a bid to convert the credit union toa saving bank three years ago were dealt a setback Tuesday by astate appeals court which ruled the members had no right to suedirectors. The three-judge panel ruled that the state credit unionstatute does not expressly grant credit union members theright to assert a direct claim against a director for breaching afiduciary duty, the Washington Court of Appeals said in its10-page ruling, obtained by The Credit Union Journal. In fact,the extensive regulatory oversight that the legislatureprovides for credit unions suggests that the legislature did notintend for individual members to bring actions against a creditunions directors; rather, the legislature contemplated thatthe (state regulator) would protect the membersinterests, ruled the judges. Dissident members of the $700million credit union had sued the credit union and the board ofdirectors over the failed conversion, claiming the directors hadviolated their fiduciary duty to members by pursuing the switch tobank. They also sought access to all records and minutes ofmeetings related to the ill-fated conversion. But two of the threejudges on the appeals court ruled that members have no right toaccess to the records.