VANCOUVER, Wash. – The long and bitter fight over whether the $650 million Columbia Community Credit Union would remain a credit union or become a mutual bank came to a head and then subsided in 2004 as the NCUA condemned the way the credit union handled the conversion vote and members of the board who had favored the change first won and then lost a pair of elections. The 2004 fight continued a struggle that began in November 2003 when it appeared that a slim majority of votes among the 16% of Columbia members who voted had been sufficient to change the credit union's charter to that of a mutual bank. But members who had attended the special meeting challenged the way the meeting and the vote had been conducted and a wave of protest letters went off to both the Washington State Department of Financial Institutions and the NCUA. NCUA and the DFI began investigations that stretched into 2004 while opponents of the conversion vote began organizing themselves into a group, Save Columbia Credit Union or Save CCU, that began to petition members for a special meeting to recall the board. The petition drive quickly became a flash point as the credit union tried to block petitioners from collecting signatures outside branches and, in at least one instance, the police were called. Save CCU countered that the credit union was acting illegally in trying to prevent members from organizing in a way that they are allowed to do by both the state and federal credit union acts. The conflict came to a head when the petitioners presented more than enough signatures and the credit union declined to recognize them or to schedule a special meeting. Litigation between Save CCU and the credit union began to fly as the Washington DFI was forced to step in to negotiate a date in late March for the special meeting. In the meantime, NCUA poured more fuel on the fire by disqualifying the credit union's previous balloting and issuing an eight-page opinion denouncing, in detail, what the agency said were deficiencies in the balloting and counting procedures. With the question of Columbia becoming a bank more or less out of the way, the focus turned to whether or not members would vote to recall the board members who had supported the change and replace them with a slate of candidates from the Save CCU group. The credit union spent a still undisclosed amount of money to protect the board members seats, taking out advertisements in the local press and at one point hiring a firm to call and lobby members on behalf of the board. Save CCU cried foul and did their best, but it was clear they were being outspent. The money clearly worked for the CU since none of the board members lost their seats. But even with the estimated tens of thousands of dollars the credit union spent on helping those board members retain their seats, they still did so with the slimmest of margins, often by just a few hundreds of votes. In the end the board's victory would be short-lived. In late September, when the credit union finally held its annual meeting that had been delayed by the controversy, four of the controversial board members who were up for regular election were swept out by some of the Save CCU candidates who ran in March – the formal part of the fight for Columbia Credit Union came to an end. But the controversy lives on. The lines between opponents of credit unions becoming banks and those supporting the change h ave solidified still more than they were previously. The shadow of the Columbia fight has hung low over NCUA's most recent regulation on conversion disclosures and has helped spur an effort at the federal level to change the percentage of credit union members who take part in conversion votes in order to have them pass. -

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