KENSINGTON, Md. -- With less than a week left before the special meeting at which the members of the $331 million Lafayette Federal Credit Union will discuss and finish voting on their potential charter change, controversy continued to dog the issue.
The biggest source of controversy came in the form of a meeting, which was to have featured Lafayette CEO Michael Hearne and a member of the CU opposed to the conversion.
The session, which was organized by CU members, was scheduled for Dec. 7 between 12:30 p.m. and 1:30 p.m. in a conference room in the U.S. Agency for International Development Headquarters. USAID is one of the larger fields of membership for Lafayette.
The format called for Hearne to speak for 10 minutes in favor of the charter change and then a member or members opposed to speak for 10 minutes. They then both were to take questions from members present.
But the day before the event Hearne withdrew from participating. In a voice mail he left for one of the members organizing the meeting, Hearne explained the meeting was turning out not to have been as he originally believed.
"I've done some further looking into this meeting you have scheduled for tomorrow and I have determined it is not exactly what it was presented to me originally and I am therefore politely declining your invitation now," Hearne said on the voice mail of Amber Brooks, a member from USAID who organized the meeting and who is one of the members who questions the conversion proposal. "I don't think this [meeting or agenda for meeting] is going to serve the purpose I was hoping to--which was to illuminate and enlighten the membership."
According to Adam Schwartz, a staffer with the National Cooperative Business Association who attended the meeting, instead of hearing both sides of the controversial charter change question, many members attending the meeting instead walked away with petitions calling for a special meeting at which the CU's board could be recalled. The NCBA is on record opposing credit union-to-bank conversions generally and the Lafayette conversion in particular.
The CU's public relations effort also lost out because a reporter and photographer from the Washington Post also attended the meeting and filed a story the following Monday on the whole controversy.
The Dec. 11 article focused on the issue and highlighted comments from members opposed to the conversion. No one from the credit union board commented for the story and CEO Michael Hearne declined an interview request stating he "didn't think it was in our interest," the paper reported.
According to the story, members circulating petitions for a special meeting at which some or all of the credit union's board could be recalled have collected about 400 of the 750 signatures they need.
The controversy came on the heels of a series of letters in which the members of the CU had tried to get the CU to share what it knew about the progress of the voting on the conversion proposal.
On Nov. 15, the members sent a letter to RSM McGladrey, the firm that contracted with Lafayette to serve as the independent inspector of elections seeking the running tallies that the members have understood the CU receives.
The members in response received a Dec. 1 letter from the Washington, D.C. law firm of Luse Gorman Pomerenk and Schick, which is serving as the credit union's special counsel in the charter conversion process. In the letter, Kent Krudys told the group that their request could not be fulfilled because it would "fall outside" the accepted protocols the CU had established with NCUA to govern the balloting.
The members then wrote NCUA for clarification of the agency's position on the matter and the NCUA has written both the members and Luse Gorman in a Dec. 6 letter that it "has no objection" to the CU making interim voting results available to members, providing they didn't reveal information about particular members and how they voted.
The CU has not returned phone calls about the meeting or sharing the voting information. --dmorrison@cutimes.com
