Columbia Fight Gets Uglier, More Complicated, At Every Turn

VANCOUVER, Wash. – The fight over whether the $600 million Columbia Community Credit Union will or will not become a state chartered mutual thrift appears to get uglier and more complicated as each day passes. On January 14 Save CCU, the organization of members unhappy with the vote to change the charter from a state chartered credit union to a state chartered mutual bank, presented almost 3,700 member signatures to the credit union petitioning for a special meeting. At the special meeting, Save CCU hopes, members will vote to rescind the previous charter change vote and vote out the current board of directors. The mood among many of the CCU supporters bordered on ebullient since they had managed to collect the signatures despite the intervening holiday breaks and despite some of the worst winter weather the entire region had seen in years. But much of the initial exuberance faded when it became clear the two sides of the dispute did not agree on the timetable for validating the signatures and calling the special meeting. Under Columbia’s bylaws which closely, but not completely, mirror the State of Washington’s statutes, the board “upon receiving an acceptable request” for a special membership meeting has 10 days in which to publish and mail a notification of the meeting, and between 20 and 30 days in which to have one. But while everyone agrees on the broad timetable, there is a lot of disagreement over the specifics. Save CCU has argued that the clock began running for both the notifications and the membership meeting on the day it delivered the signed petitions. The credit union has countered that the clock will begin running only after it has validated those signatures and, further, after it has made sure they accompany an “acceptable request.” Not surprisingly, Save CCU quickly charged Columbia’s leadership with stalling. “It seems to us that the meaning in the bylaws is quite clear and that the credit union is merely stalling,” said Steve Straub, a former CEO of the institution and one of the supporters of Save CCU. Straub, who had been CEO of Columbia Credit Union from 1988 to 1992, said the bylaws had left plenty of time for the credit union to validate the signatures and that the credit union leadership was trying to buy time. But Brian Witt, a long time attorney for credit unions who is based in the Portland, Oregon, area and who is Columbia’s attorney in this matter, denied that Columbia was “stalling.” “People don’t realize how big a job this is,” said Witt. For example, none of the names have account numbers, he explained, making the signature cards hard to find among the credit union’s 11 branches. Witt also argued that the credit union sought to speed the process because of the resources dealing with the petition was likely to require. He also signaled a willingness to explain the process and the obstacles the credit union faces to the leaders of Save CCU. But Straub indicated that the subject of the time frame never came up when the two finally spoke and that, from his perspective, the credit union was still not fulfilling its obligations under its own bylaws. He also questioned whether the Washington State statute, which Columbia’s bylaws closely mirror, includes the word “acceptable.” The criteria for what the petition must include are in the bylaws, Straub argued, there should be no judgment as to the petition’s acceptability if it has those required elements. The dispute hearkens back to a line from the credit union’s petition procedures, which Columbia officials handed Save CCU when members brought in the petition. That line read that the credit union will review the petition for its “acceptability under applicable law.” Witt declined to elaborate for the record on what laws might be considered in such a review. These questions of timetable and acceptability have been left in the hands of the Credit Union Division of the Washington Department of Financial Institutions whose Director, Linda Jekel, confirmed that Save CCU had asked for its legal opinion on a number of Columbia’s actions, including whether or not the clock began ticking on the 10-day notice deadline on receipt of the signatures and whether or not the credit union would have to hold the special meeting before February 13. “We have drawn up our legal opinion and now we are trying to get an Assistant Attorney General to take a look at it,” Jekel said. The Division expects to announce its decision sometime on January 21 or 22, and a well-placed source believed the Division’s initial draft opinion favored Save CCU’s contention that the clock on the 10 days began when the petitions were delivered. When contacted about that possibility Straub indicated no surprise. “We have believed our petitions were within the credit union’s bylaws from the beginning,” he said. Headed to Court? No matter what the DFI decides, the likelihood that the entire matter might end up in court appears to have risen significantly. Straub hinted as much, saying that under the credit union’s bylaws it was obligated to send out a notification about the special meeting no later than Saturday, January 24. If Columbia fails to meet that deadline or disputes it, the matter might be left to DFI or, if DFI leaves something up in the air, a judge might have to decide it. One thing upon which sources on both sides agreed, off the record, is that a move by NCUA to ask for another vote in the charter change decision would probably ease a lot of the pressure in the situation. Save CCU might not have to worry so much that Columbia would make the charter change before the special membership meeting could be held and Columbia’s leadership might have a way to back away gracefully, through a negative membership vote, from a situation it could not have foreseen. “I am sure that if Columbia had looked down the road six months ago and seen how all this turned out, they probably would have reconsidered,” the source said. “It’s really become a lot more trouble than they could have anticipated.” -