Governance Disputes Return to PSFCU
The 68,000 member credit union serves a primarily Polish-speaking community in New York City as well as in the New Jersey suburbs and on Long Island. Over the years it has built a strong reputation for community involvement. Polish and Slavic has launched and maintained a generous scholarship program as well as outreach to recent immigrants. However, Polish and Slavic has also earned a reputation for fractious governance with contentious board fights that have wound up in court and has landed in significant hot water with the NCUA in the past.
The two most recent squabbles involve a member of the board who was removed in October 2008 as part of what appears to be a row between the credit union and its chief sponsoring organization. There have also been allegations that the board is trying to manipulate the credit union's current elections.
The fight over the removed board member got under way in late 2008, according to members of the credit union and NCUA documents concerning the dispute, when after a series of meetings from Oct. 31 to Dec. 10, the board voted to remove Krystyna Myssura from the board and declared her seat vacant.
Although Myssura, a New York State immigrant community liaison, had been first elected to serve in 2003 and had been twice re-elected, the board alleged several misdeeds as the reason for its decision. According to the board, Myssura had violated board confidentiality, her fiduciary duty and the credit union's code of ethics. Her ethics violations had involved, allegedly, wasting credit union resources and improperly influencing other board members, the board charged.
Myssura promptly took the board to state court and on Dec, 15, obtained an order preventing the credit union from filling her seat. She also appealed to the NCUA, which asked the court on June 9 not to act until it had finished its review of the matter.
According to Myssura and other credit union members who object to her removal, the ultimate cause of her removal was a political fight between the credit union and it's chief sponsoring organization, the nearby Polish and Slavic Center.
The Polish and Slavic Center serves as a community, social and recreation center and membership in it used to be necessary for membership in the credit union. But according to Jack Bakowski, a Polish and Slavic member who supports Myssura, a faction of the board sought to add other, similar centers in other locations to Polish and Slavic's list of sponsoring organizations and, two years ago, announced the credit union would stop passing on dues from its members to the center.
Myssura contended she ran afoul of the board by being one of the board members who questioned that decision and who asked to see the contract between the credit union and the center, which the board said Polish and Slavic had decided not to renew the year before.
"I asked why we were no longer passing on the dues and to see the contract that they said they had decided not to renew in 2003, but then they kept passing the dues on to the center for the next five years, so I don't know what was going on. I asked the questions and kept on asking," she said.
Bakowski suggested the move to cut off dues to the center might have been a political attempt to starve a former board member, Bozena Kaminski, of both power and funding. Kaminski in the past has been an outspoken critic of the current credit union board, and she and her husband had been previously associated with a board faction. Kaminski is president of the center's executive board and had not returned calls for comment as of press time.
Although Myssura's case seeking reinstatement through the courts stalled due to the court's inability to find credit union board members to serve, the case nonetheless ratcheted higher when, in January, NCUA Region 1 office came down firmly on Myssura's side. It was inappropriate, the NCUA said, for the credit union board to have removed Myssura and try to vacate her seat. Only credit union members could do that, the NCUA said, through a special meeting called for that purpose.
Polish and Slavic did not reinstate Myssura, however, and their intransigence has drawn a further rebuke from the agency, this time from NCUA General Counsel Robert Fenner.
After noting that current credit union law and regulation vests the authority to remove credit union board members in the credit union members themselves, Fenner noted that this incident makes up a worrisome trend for PSFCU.
"As represented by PSFCU's counsel this is at least the third time a minority member of the PSFCU Board has been removed or threatened to be removed by the remaining board members," he wrote in his Sept. 4 letter. "This is a dangerous path for PSFCU Board, or any other credit union board, to tread as it serves to ignore the wishes of the voting membership as well as potentially undermine the credibility of the entire election process."
"The entire matter appears to rest on the fact that the current majority of the board simply does not agree with Ms. Myssura's style, philosophy or methods of serving as director," he added. "If the board truly believes Ms. Myssura's alleged conduct warrants removal, they should call a special meeting of the membership and allow the members of the membership to decide whether to keep her on the board."
So there the measure rested as of press time. Polish and Slavic did not respond to phone calls or e-mails seeking comment, and the last word on this particular fight may belong to Anthony LaCreta, the NCUA's acting regional director for Region 1.
"Until this matter is appropriately resolved, I intend to consider the board's conduct in this matter
in connection with any supervisory activities
involving PSFCU, including any requests for approval or forbearance by PSFCU," LaCreta said in a letter dated Sept. 9.