OLYMPIA, Wash. – Mindful of both state and national attention oncorporate governance, the State of Washington's Credit UnionDivision is making available model codes which set out policyrecommendations for membership voting, board elections, ethics, andother issues to credit union managers and volunteers. The modelcodes are “strictly for discussion and we hope credit union boardstake a look at them” in light of new complexities andresponsibilities for directors, explained Linda Jekel, the divisiondirector and head of an industry-backed 2005 Governance Task Forcewhich produced the codes. The policies, detailed in a 57-page taskforce report issued in September and circulated this fall amongWashington CUs, are a fallout, officials said, of the thwartedColumbia Credit Union conversion to a mutual savings bank nearlytwo years ago. In a bulletin accompanying the models, Jekelstressed that her division requested the task force to help answerquestions about election of officials and membership rights. Shesaid the policies are offered to credit unions as suggestions, donot have the force of law, and are not part of the examination. Thepolicies cover such areas as campaigning for office; member accessto corporate records; elections; and reporting of illegal,fraudulent or dishonest conduct-whistleblower provisions. Jekelexpects further discussion of the codes this spring, probably inMarch or April, when she meets with members of the “Save ColumbiaCU Committee.” She also said she intends to meet with arepresentative from O Bee CU of Tumwater. The CU's directors hadraised concerns with the Washington Credit Union League last Mayabout the role of elected volunteers in league leadership. Morerecently, O Bee directors had complained about a lack of volunteerson the task force itself, which was put together by Jekel and theWashington League. Officials said the 14-member task force, whichcontains a preponderance of CU attorneys but also has CEOs and onevendor representative, was organized by Jekel and Stacy Augustine,senior vice president and general counsel for the league, as aresult of thorny membership issues raised during the Columbia CUscrap in Vancouver. “There were questions raised about thedemocratic process in electing and nominating candidates,” saidJekel. Since September, Jekel and her staff, joined by the league,have conducted a series of four meetings across the state todiscuss the model policies. Describing governance “as still prettytop of mind” among CU managers, Augustine said the task force is anoutgrowth of a Washington and Oregon attorneys group which meetsinformally and regularly to discuss legal problems impacting theindustry. “Some issues did come out of the Vancouver altercations,”she said, noting that CU executives have grappled ever since ofwhat is fair and unfair in handling elections. The task force hasissued a report. It starts by noting that the implementation ofgovernance standards under Sarbanes Oxley “have increased memberand regulatory scrutiny” over corporate governance issues and thatwhile only two provisions on document destruction and whistleblowerprotections “explicitly require credit union compliance (with orwithout a policy) the Act addresses many processes and practicesthat may be relevant to credit unions.” The report went on to saythat “the scandals associated with the passage of Sarbanes Oxleyare expected to have an effect on consumer expectations. “Forexample, once consumers come to expect all publicly tradedcorporations to have a policy on ethics, they may also expect theircredit union to have an ethics policy,” the report stated. Creditunion attorneys said the Jekel task force has already triggeredwide-scale reviews of internal governance policies at CUs in bothWashington State and Oregon. “I can't say it is all due to the taskforce meetings, but some of my clients are already moving aheadwith changing their policies, many of which are based on bylawsthat are 35 years old,” said Portland attorney Hal Scoggins apartner with Farleigh & Witt. -

|

[email protected]

Complete your profile to continue reading and get FREE access to CUTimes.com, part of your ALM digital membership.

  • Critical CUTimes.com information including comprehensive product and service provider listings via the Marketplace Directory, CU Careers, resources from industry leaders, webcasts, and breaking news, analysis and more with our informative Newsletters.
  • Exclusive discounts on ALM and CU Times events.
  • Access to other award-winning ALM websites including Law.com and GlobeSt.com.
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.