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

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

In a sharp rebuke to league “direction and policies,” Stephan charged table officers erred not only in the way they pick new CEOs, but also had acted unprofessional in failing to consider “the wishes and concerns of its real constituency, the voters, the credit unions of New Jersey.”

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

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

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

Named to fill her term was Salvatore Schiano, a director and former 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 East Windsor.

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

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

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

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

“Two years ago I did speak to the New Jersey board when questions were raised about the possibility of a merger with our association and I told them it was not a good idea considering their league is too big and important in the industry, needing its own 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 and processing functions of New Jersey league operations if requested.

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

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

“Our needs are quite different from Delaware's,” said Stephan noting also the league stewardship in dealing with declining membership has been poor with New Jersey having one of the lowest penetration levels in the U.S. And he said there are problems with heavy emphasis on vendor linkups to the detriment of other services.

Moreover, like other New Jersey CEOs the Toms River executive maintained the overall track record of the table officers' methods in handling the top staff slot has been poor and needs a major overhaul.

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

Instant Insights /

New Jersey League Still Battling Issues Surrounding CEO Firing, Fills Two Vacated Spots on Board

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