HIGHTSTOWN, N.J. — This has been a rough spring so far for theNew Jersey Credit Union League, rocked by last month's firing ofits president/CEO Robert Walls, the resignation of two of itsdirectors, and some internal bickering over the organization'smission and servicing methods.

The league leadership has remained tight-lipped about thereasons for Walls ouster and has said nothing about blunt criticismof league operations and handling of the Walls announcement by adeparting and disgruntled director, Issa Stephan, president/CEO ofFirst Financial Federal Credit Union of Toms River.

In a sharp rebuke to league “direction and policies,” Stephancharged table officers erred not only in the way they pick newCEOs, but also had acted unprofessional in failing to consider “thewishes and concerns of its real constituency, the voters, thecredit unions of New Jersey.”

In comments following his May 9 resignation letter, Stephan alsojabbed at what he said were poor results from the league's“Bob-Difference Is You” co-op advertising campaign and internalweakness in servicing the needs of large and medium-size CUs.

Privately, some members of the league board have said Stephan'sviews are not universally shared and indeed many CUs have applaudedleague services in education and training since Walls took overin
July 2005.

Last week the league moved quickly to fill Stephan's vacancy onthe board as well as that of another departing director, LourdesGarcia, president/CEO of North Jersey Federal Credit Union, Totowa,who resigned May 18 for “personal career reasons” declining commenton the Walls announcement or on league business.

Named to fill her term was Salvatore Schiano, a director andformer chairman of Xcel Federal Credit Union of Jersey City.Appointed to complete Stephan's term is Shawn Gilfedder,president/CEO of McGraw-Hill Employees Federal Credit Union of EastWindsor.

Stephan's departure from the board was more noteworthy since theFirst Financial executive had been named May 5 by Rina Pantano,league chairman, as one of five members on a league searchcommittee to find a replacement for Walls.

A league spokesman for Pantano, who also is president/CEO of NJGateway Federal Credit Union of Monmouth Junction, said Stephan'sreplacement on the committee has not been made.

Meanwhile, league officials last week were denying any prospectthat the 230-member league might pursue a merger with one of itslarger neighbor leagues, like New York or Pennsylvania.

Sources said the idea of looking at a merger with thePennsylvania Credit Union Association was “an option” discussed atan April board meeting following Walls April 23 abrupt dismissal.Another high-placed source however said a merger was not on thetable.

“Two years ago I did speak to the New Jersey board whenquestions were raised about the possibility of a merger with ourassociation and I told them it was not a good idea consideringtheir league is too big and important in the industry, needing itsown independent representation in Trenton,” said James McCormack,president/CEO of the Pennsylvania Credit Union Association.

McCormack said, however, that PCUA, like other state leagues,would always look at taking over more of the business andprocessing functions of New Jersey league operations ifrequested.

Like other state league CEOs, McCormack said he had no insideinformation on the Walls departure and the former Delaware LeagueCEO's problems with the New Jersey League board, except that “Bobis a good man and talented.”
Although Stephan is the only CEO on the board that has spoken outpublicly about what he says are deficiencies in league operations,other CEOs in the chapter network and elsewhere have complainedabout “too basic” training and education seminars for the largerand medium sized CUs.

“In this day when we are facing stiff competition, we need toknow more about sophisticated cross selling techniques, handling ofcontracts, legal advice, compliance and much more,” said one CEOwho asked not to be quoted.
While declining to discuss the specifics of Walls announcement,Stephan maintained the original appointment of Walls “representinga league like Delaware with many small credit unions” and a moreunified environment may not have been the right fit for NewJersey.

“Our needs are quite different from Delaware's,” said Stephannoting also the league stewardship in dealing with decliningmembership has been poor with New Jersey having one of the lowestpenetration levels in the U.S. And he said there are problems withheavy emphasis on vendor linkups to the detriment of otherservices.

Moreover, like other New Jersey CEOs the Toms River executivemaintained the overall track record of the table officers' methodsin handling the top staff slot has been poor and needs a majoroverhaul.

The hiring of Walls two years ago followed the termination ofWalls' predecessor, Thomas Shaughnessy, convicted of embezzling$300,000 from the league. Shaughnessy had replaced Russell Clark,who had been summarily fired earlier.
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