The president of U.S. Central Credit Union has resigned, citing interference from the industry's largest trade group.
In a strongly worded letter, James R. Bell said that serving two masters - the Credit Union National Association and U.S. Central - was damaging the Overland Park, Kan., institution.
"I see no solution to the dilemma facing U.S. Central with our current structure," said the March 6 letter, which was addressed to U.S. Central chairman Charles Whitney.
"I request that I be relieved of my responsibilities as soon as possible," the letter added. The resignation took effect March 10.
U.S. Central, which has $21 billion of assets, acts as the industry's chief liquidity center. It invests surplus funds of the nation's 43 corporate credit unions, which handle liquidity needs for ordinary credit unions.
Until last year, U.S. Central operated under a management contract with the Credit Union National Association. While the trade group still dominates the institution's board, this arrangement would be ended by a regulation the National Credit Union Administration adopted last year and that CUNA is suing to block.
While Mr. Bell had earlier announced plans to retire, the timing of his departure came as a surprise. Last year, he said he would stay until a replacement was found or until the end of the year. The search for a new head is continuing.
Mr. Bell declined to comment on the letter in an interview last week. But he did criticize CUNA's influence over U.S. Central.
"NCUA is trying to solve the problem of political control of U.S. Central, and I have high hopes that they will be successful," he said. "I hope the CUNA suit is not successful."
Mr. Bell's letter depicted a hostile relationship between U.S. Central's board and management. In it he referred to a meeting in which CUNA president Ralph Swoboda called him a "liar." Why Mr. Swoboda used that word isn't clear, although the letter notes that he recanted it.
"It has been a full week since our board meeting where I was accused of lying and U.S. Central management was characterized as unethical," the letter began. "The aftermath of the gutter atmosphere of that board meeting has not made for a good week at U.S. Central. I have not, in my entire professional career, observed management morale at such a low ebb."
In an interview, Mr. Swoboda didn't comment on use of the word "liar" but did say the meeting was contentious.
He also criticized Mr. Bell's analysis.
"I disagree with Jim's characterization of CUNA and league politics as being the source of tension within U.S. Central," Mr. Swoboda said, referring to state trade organizations that are subsidiaries of CUNA. Tension is primarily between large, aggressive corporates and smaller, plain-vanilla corporates, he said.
Nevertheless, Mr. Bell wrote in his letter, dealing with "political assaults" from the trade group was hurting business and wearing down employees.
"We are behind on resolving our capital problem," the letter said. "We are behind on developing our risk management control process. These issues are critical to U.S. Central's improving its safety and soundness, and even its viability."
"I have no confidence I can retain my senior management staff in such a politically stifling atmosphere," the letter said. "We are physically and emotionally exhausted by the endless political assaults."
Chuck Purvis, acting president of U.S. Central, said he wasn't familiar with the letter but said employee morale was high and the institution's financial condition sound. In an interview, Mr. Bell also said the institution's financials are strong.