Microlender Seeking CU Charter in Political Power Struggle
The founder of an international microlending bank, which has a United States affiliate that was considering opening a federal credit union in North Carolina, is in the middle of an internal power struggle.
There are conflicting reports on whether Muhammad Yunus, founder of Grameen Bank, a microlending bank formed in Bangladesh, has been forced out. The New York Times reported March 2 that Yunus was terminated as managing director of Grameen Bank, citing a statement from the bank’s chairman, Muzammel Huq.
The termination was allegedly due to improper oversight and governance, including an alleged $100 million donation by the Norwegian government for housing loans to another nonprofit affiliate of Grameen, among other factors, The Times reported. A government investigation in Norway confirmed that the money had been improperly moved but said that it was returned to its rightful place and that no money had been stolen or misused, according to the newspaper.
Grameen America is the New York-based affiliate of Grameen Bank. An association calling itself Friends of Grameen provided Credit Union Times with a March 1 statement denouncing Huq’s actions and statements.
"After already several attempts to push Professor Yunus aside, and a number of frivolous legal cases being launched against him, this event is a further step in the escalation of the effort by [the] government of Bangladesh to oust Professor Yunus and take control of Grameen Bank," the statement read. "The people behind this whole fight are manipulating government bodies to use groundless arguments in their ideological haste of ousting Yunus, which will inevitably lead to illegal actions being taken by government representatives."
Once exploring the launch of a federal credit union in North Carolina, microlending bank Grameen America will receive a $450,000 grant to help spur small business growth in low-income communities there.
The two-year grant comes from the Z. Smith Reynolds Foundation, established in 1936 as a memorial to the youngest son of the founder of R.J. Reynolds Tobacco Co. The funds will be used for fundraising efforts to form a Grameen America branch in North Carolina, said John Lassiter, fundraising co-chairperson for Grameen America North Carolina.
In February 2009, Grameen America met with officials from State Employees' Credit Union, Self-Help Federal Credit Union, the North Carolina Bankers Association and both the North Carolina Commissioner of Banks and the North Carolina Administrator of Credit Unions to discuss setting up an affiliate in the Tar Heel state. All welcomed the bank's concept. Grameen America had previously expressed interest in obtaining a federal credit union charter in North Carolina. The bank provides small, short-term loans to mostly poor women to start small businesses.
Grameen America had expressed interest in obtaining a federal credit union charter in North Carolina but later said it was one long-term strategy being considered. The NCUA said that on Aug. 13, 2009, it approved a field of membership request from Grameen, but that the agency had not received a formal charter application.
Meanwhile, Friends of Grameen said Huq should not remain as chairman of Grameen Bank.
"He appears to be simply not a man of the stature to chair the board of a Peace Nobel Prize winning organization, and his attitude during the board meeting will certainly not help restoring the credibility he lost many years ago to the eyes of many Grameen Bank women and employees."
The association was referring to a Feb. 28 board meeting where Huq read a statement questioning Yunus’ role with Grameen Bank.