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VANCOUVER, Wash. – Washington State Superior Court Judge Roger Bennett has ruled in favor of Save CCU and has ordered Columbia CU to hold the special meeting that Save CCU petitioned for which could result in the recall of eight members of Columbia’s nine-person board. The judge ordered the credit union to hold the special meeting at which a recall vote could proceed, writing: “[d]efendants are compelled to give notice and schedule a special membership meeting, consistent with statutory requirements, at which special membership meeting a vote will be held on whether or not to remove the designated members of the Board of Directors still holding office.” Bennett specifically attacked the credit union board’s contention that it had the power to adjudge a petition for a special meeting “acceptable” or not under Washington’s credit union act. “Nothing in [the law] purports to allow the Board to delay or deny the request on the Board’s determination as to what is acceptable, or unacceptable,” Bennett wrote, except to make sure that the petition be in writing and that it have 2000 signatures. Speaking for Columbia’s board, Board Chair Karen Martel praised the ruling for recognizing the merit of the credit union’s argument in favor of a mailed ballot and expressed disappointment that possible interim board members would not be named in the mailed ballot. “This ruling, in part, supports our mission to protect the voting rights of all Columbia members on a decision crucial to the safety and soundness of our institution,” Martel said in the press release, adding: “I’m disappointed that Judge Bennett could not find stronger provision in the law to ensure that members know who would be nominated in advance of the special meeting.” The court ruling has left many details to be worked out. First, while the court agreed to enforce Save CCU’s petition for a special meeting at which eight of the board’s original nine directors could be recalled, it agreed with the credit union’s assertion that the recall needed to be open to all members in a mail ballot. That means that credit union members would receive a special meeting ballot through the mail on which they would have to vote eight times to retain or recall the eight members. But members could still attend the special meeting whether or not they voted on the recall through the mail and it remains unclear whether members who voted through the mail would be able to change their votes at the special meeting. Columbia CEO David Doss changed the status of the ninth board seat to “interim” after it became clear that Columbia’s bylaws did not allow a credit union employee to sit on the board. There is already one nominee for that seat, Bruce Davidson, currently a supervisory committee member, according to Columbia’s Web site. Davidson’s status, in light of the court’s decision, is hazy because it is unclear whether he would be considered a board member by the time of the special meeting. Second, it is the members attending the special meeting who would decide whether to vote interim board members into vacant seats or to allow Davidson, the board’s potentially one remaining member (if all eight others were recalled), to appoint people into those seats. This is important because interim board members voted in at the special meeting fill the remaining terms of the recalled members. Members appointed by Davidson would only serve until the next annual meeting. Third, potential conflicts with the credit union’s annual meeting will need to be negotiated. As part of its previous compromise with DFI, Columbia already agreed to move its annual meeting to April 27 and to make the nomination process for the board easier. Candidate packages to the credit union’s members are supposed to go into the mail no later than March 26, according to the agreement. This has significance because four of the existing board members are up for reelection at the annual meeting and it is unclear, if they are recalled at the special meeting, what will happen to their candidacies. It’s possible, for example, to have board members with candidate materials before the members who could be ruled ineligible for reelection because they have been recalled. This potential election conflict could mean Columbia appeals the decision or asks the court to stay its ruling. In a press release the credit union noted that it had only recently sent the first notification of the annual meeting, pursuant to the DFI agreement, and it wrote: “Prompt implementation of the court’s ruling could cause member confusion due to Special Meeting and Annual Meeting election periods overlapping. Columbia’s board will review options, including a stay of the order or perhaps an appeal, while working cooperatively with judicial and regulator requests for a solution that best serves all Columbia Credit Union members.” There are also questions in regard to what information can be included in the recall mailings. “We can count on the credit union to try to slant this every way possible,” said Steve Straub, a key organizer of Save CCU and former Columbia CEO. “We want to make sure that the mailings are balanced.” Judge Bennett’s order instructed Columbia and Save CCU to appear again at a special hearing on March 8 at which some of these details can be negotiated and finalized. Linda Jekel, Director of the Credit Union Division of DFI, said the Division was still studying the decision and would not comment yet. However, the Division might be open to providing the Court with an affidavit of its opinion of how the special meeting might be run, she explained. Meanwhile there has been a lot of speculation about what might be decided on March 8. “We haven’t talked about it, but since there is a mail ballot date already, it may be that the recall information can be in the same mailing,” said Doug Schaeffer, the attorney for Save CCU. But Straub differed, noting that a combined mailing might only heighten member confusion about both ballots and meetings. Straub suggested that, under Columbia’s bylaws, it was almost certain that a special meeting and ballot would happen prior to the scheduled annual meeting and that, once a new board was in place, the new board could approach DFI about rescheduling the annual meeting for later in the year. Straub also promised that Save CCU would have a slate of candidates to offer members at the special meeting upon which they could vote to become interim board members. These candidates, contrary to Columbia’s suggestion, would not be people inexperienced with credit unions but would instead be people with a background in credit unions, Straub explained. “Columbia’s board has been running around telling everybody that these wild eyed extremists and radicals are going to take over the board,” Straub said, “and that is just not true. We are going to have a slate of people who are both experienced with credit unions and have a heart for credit unions as credit unions.” Straub declined to say whether he would be a candidate for the board, but pointed out that, should he become a board member, that would rule out his becoming CEO which has been another one of Columbia’s suggestions. Under the credit union bylaws, employees of the credit union cannot serve on the board. The court battle started because although Save CCU garnered enough signatures to call the special meeting back in January, the Washington Department of Financial Institutions elected not to enforce the meeting, saying the matter could be settled quicker in court than through its administrative procedures. Key organizers of Save CCU said they felt vindicated by the ruling, noting that the court had recognized what they had sought from the beginning, which was the members’ right to control their own credit union. -

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