NCUA General Counsel Mike McKenna said in a March 29 legalopinion he disagrees with the $161 million St. Helens CommunityFCU's claim that a federal lawsuit filed by a member should bedismissedbecause it is not within the jurisdiction of federal court.

The letter was submitted by plaintiff Steven Knebel to the courton April 1, along with his response to the St. Helen, Ore., creditunion's motion to dismiss the case, which challenges the vote counttaken during a special meeting in September in which members votedto not recall five directors.

Knebel was among a group of members who spearheaded a recall petition in June 2012 to remove the directors over thedismissal of former SHCFCU CEO Jeff Schwarz, and in opposition to aproposed merger with the $152 million Wauna FCU. The merger hassince been scrapped.

In the letter, McKenna said state law should not play a role indetermining governance issues when the Federal Credit Union Bylawsare clear and unambiguous. The NCUA incorporated the bylaws intoits regulations in 2007, in part to clarify the regulator'sauthority to take action on bylaw violations.

McKenna also supported Knebel's primary complaint in the suit,that the 15,285-member credit union counted mailed ballots, a bylaw violation.

The NCUA attorney cited federal bylaws that state any directoror committee member can be removed from office by majority vote ofmembers present at a special meeting called for the purpose.

“The use of the phrase 'present at a special meeting' precludesthe possibility of voting in absentia by mail to remove adirector,” McKenna wrote.

He went on to explain that the bylaws require members to hearthe recalled volunteer's position on the matter before voting.

“If voting by mail were allowed in lieu of being present,members would be denied the opportunity to observe the director'sdemeanor, hear the director's defenses, and ask the directorquestions,” McKenna wrote. “The give and take that is part of beingpresent at a special meeting provides a director with more dueprocess and better informs the membership.”

SHCFCU spokesman Barbara Harris declined comment. Knebel couldnot be reached for comment Wednesday.