Five months after a recall vote failed to remove five board directors at the $161 million St. Helens Community Federal Credit Union , a member is suing the credit union in federal court to oust the board directors.
The lawsuit, filed by 10-year member Steven S. Knebel of Scappoose, Ore., claims that the St. Helens, Ore., credit union has refused to comply with its bylaws, permitting the five recalled board directors to continue serving.
SHCFCU CEO/President Brooke VanVleet said the credit union wholeheartedly believes the lawsuit is without merit.
“We are prepared to vigorously defend our position and are confident we will prevail,” she said.
Knebel was part of a group of members who started a recall petition in June 2012 to remove five of the seven board directors after members became upset with the dismissal of former SHCFCU CEO Jeff Schwarz. They also had concerns and questions about a proposed merger with the $152 million Wauna Federal Credit Union in Clatskanie, Ore.
Merger discussions between the two credit unions were called off last year. VanVleet said Tuesday those merger discussions have not resumed nor are there any plans to resume them.
The recall petition led to a special meeting of the members in September 2012 to vote on whether to retain or recall the five board directors, Lea Chitwood, Michael Hafeman, Richard Louie, Marty Borrevik and David Graham. According to SHCFCU, the members voted to retain the board directors.
Knebel contends in his lawsuit, however, that the SHCFCU “counted votes which were not eligible to be counted” under the credit union’s bylaws.
For example, the credit unions counted mail-in ballots of members, which were ineligible, according to the lawsuit. Knebel said the bylaws allow mail-in ballots to be counted as a vote but only if members request in writing that a ballot be mailed to them. Instead, ballots were mailed to credit union members without their request, said Knebel.
What’s more, the credit union’s bylaws also state that any director or committee member may be removed from office in an affirmative vote of a majority of members present at a special meeting but only after an opportunity has been given to be heard.
Knebel said he believes the five board members would have been recalled if the credit union counted only the votes of members who attended the special meeting and the mail-in votes from members who requested the mail-in ballots.
“Since they did not reveal the vote break down, then obviously we prevailed,” he said.
However, VanVleet said the membership voted to retain the five directors by a margin of more than 70% for each director.
Knebel’s lawsuit is asking the federal court for a declaratory judgment that would recall the five members.