JoAnn M. Johnson, Iowa's superintendent of credit unions, saidattempts made by some disgruntled members of the $20 million FamilyCommunity Credit Union in Charles City, Iowa, to dismiss the boardof directors, suspend the CEO, reinstate former employees, appointnew board members and reinstate the former CEO, were not incompliance with the bylaws of the credit union and the Iowa CreditUnion Act.

These actions were approved via motions voted on by some memberswho attended the credit union's annual meeting Feb. 16.

In a three-page letter to the credit union's 4,120 members onMonday, however, Johnson, former NCUA Board chair, described themotions as “legally insufficient.”

The motion to dismiss the board of directors “must be put to avote of all eligible members, not just the members in attendance ata particular meeting,” Johnson wrote. “In short, the motion todismiss fails to meet the procedural requirements established bythe bylaws and the code, and therefore is legallyinsufficient.”

Apparently, some members were not happy with CEO/President DawnSwaningson after her appointment to the position in January.

In addition to suspending Swaningson, members at the annualmeeting voted to reinstate former staff as well as formerCEO/President Mike Schear. Member also appointed new directors.Johnson also called these motions legally insufficient.

“In sum, because these attempted actions at the annual meetingwere legally insufficient, CEO Dawn Swaningson remains as managerof Family Community Credit Union,” wrote Johnson. “And thepreviously elected board of directors, with the three memberselected by ballot during the annual meeting, remains as therecognized board of directors of Family Community CreditUnion.”

What's more, Johnson also had a few “words of caution” in herletter that making false statements to hurt the credit union is acriminal offense under Iowa law.

“Finally, we would caution persons who may publish orotherwise circulate any false statements about the credit unionthat may injure or tend to injure the business or goodwill of thecredit union, which is a misdemeanor under Iowa Code 533.508,”Johnson wrote.

A call to Swaningson for comment was not returned.