Right Man For Now? Lafayette FCU Names Director as CEO; Members Express Skepticism
KENSINGTON, Md. -- The $296 million Lafayette Federal Credit Union has announced a new chief executive to replace Michael Hearne, its controversial departed CEO. But some members who opposed the credit union's attempt to change to a community bank charter doubt that the new executive will bring the CU the reconciliation they believe it needs.
The new man named to occupy Hearn's position is B. John Farmakides, the treasurer of the credit union's board of directors as well as a former longtime member of the CU's supervisory committee. Farmakides' background also includes tours in investment banking and commercial real estate as well as over 10 years of experience with the U.S. Small Business Administration, the CU said.
Lafayette never formally announced Hearne's departure but Hearne confirmed that he had left through e-mails to other CEOs. Lafayette finally stated that Hearne had left in the announcement announcing Farmakides' hiring.
"Mr. Hearne provided outstanding leadership to the credit union for more than three years and the Board wishes him much success as he pursues new endeavors," said Arnold Rosenthal, chairman.
"I very much look forward to growing the credit union and creating an environment that offers exceptional customer service to our membership," Farmakides said. He added, "I see tremendous opportunity for managed growth in the Washington metropolitan area and have every confidence that Lafayette will continue as a leading credit union in this area."
Lafayette has been roiled by controversy ever since an attempt to change its charter to that of a mutual bank failed along with an attempt to recall members of the board of directors who voted for the change. The credit union has lost significant assets and seen declines in membership and deposits,
at a time when most credit unions saw increases in those areas.
The difficulties Farmakides faces trying to set the CU back on a growth track may have been what drew a favorable comment from Norman Cohen, a
former chair of the CU and a man widely acknowledged among long-term Lafayette members as a
pillar of the CU.
"Mr. Farmakides' background in finance, law and commercial real estate will serve him well as he grows Lafayette FCU and delivers the credit union's residential and commercial product lines and services to new and existing members in the Washington metropolitan area," said Cohen in a prepared
statement from the CU that identified him as a Chairman Emeritus.
"Mr. Farmakides also brings nearly a decade of experience as a volunteer at Lafayette FCU, where he served as chairman of the Supervisory Committee and later as Treasurer of the Board. Because of his long association with Lafayette as well as his extensive business experience, Mr. Farmakides has a firm understanding of the organization's strengths and exciting opportunities and will leverage those for the benefit of LFCU's membership."
"Essentially Mr. Cohen is a very nice man who wants to help out the credit union," said one Lafayette member who declined to speak for the record. "But that doesn't mean that Farmakides is necessarily the right man for right now. I don't mean anything personal towards him but we need someone who is going to help us put this behind us and Farmakides is just too close to it."
The member referred to the perception among members who opposed the CU's attempted move to a bank charter. Farmakides was in the thick of planning for the move and had leant his full support to it, more support than even might have been expected from a board member, said the member.
"I think Farmakides was in on it from the beginning," said another member who would only identify himself as working for USAID. "He was a member of the conversion triumvirate, he and Rosenthal and Hearne. I don't know there will be much change."
The members, who all acknowledge that they opposed the CU's conversion, expressed varying degrees of doubt about how sincere Farmakides would be as a supporter of the credit union as a credit union. A couple echoed previous member comments that the CU's leadership still wanted to convert the institution to a bank charter.
One longtime member asserted that Farmakides served on the supervisory committee for much longer than he had been a board member, much less board treasurer, but the CU provided no more information about this.
But another Lafayette member who agreed to
talk outside the credit union's Kensington headquarters branch said she was willing to give Farmakides the benefit of the doubt and said she hoped he would do well.
"I like the credit union and they have helped me in the past so I hope they stay strong," she said.