Opposition members then focused on the board elections, mounting a slate of candidates which was defeated, members say, by a margin of only 30 votes, and now the special meeting effort is on again. (Lafayette's announcement of the election results on its Web site did not include a vote tally.)

"One result of the election is that now we know their measure," Carter said. "Now we know they can get between 100 and 150 of their employees and family and friends of board members to turn out on a Saturday for an election. We will just have to have more."

The credit union and members agree that between 265 and 300 members attended the meeting.

Member turnout to vote grew in importance after the board made a controversial change in the CU's bylaws which limited voting in board elections at the annual meeting to those members who could actually attend. Lafayette Chairman Arnold Rosenthal then threw more fuel on member discontent about the rule change when he responded that the board had

made it to make voting a test of member "sincerity."

"That really incensed a lot of people," Carter said. "Someone asked from the floor whether Rosenthal was suggesting that the members who were serving in Iraq or Afghanistan or other hot spots around the world were not sincere because they could not attend. But of course, he changed the subject."

Carter said that remark, combined with the overall way Rosenthal handled the often lively and occasionally combative meeting was behind some of the increased member interest in recalling the board.

"Without a doubt [CU Board Chairman Arnold] Rosenthal is the most obstreperous, difficult and cantankerous chairman around," Carter said. "Just seeing the way he handled things at the meeting has prompted a good many people who were sitting on the fence regarding the special meeting to want to get more involved," he added.

Where Is Hearne?

One of the questions Carter and other members said Rosenthal had to field from the floor concerned why he was moderating the meeting, a role CU CEO Michael Hearne usually filled. Carter and other members attending the meeting said Rosenthal said that Hearne was on leave at the request of NCUA because of some "minor" Bank Secrecy Act violations and that he was expected back soon.

But when questioned for this story as to whether Hearne had returned from the leave, Ronda Polhamus, Lafayette's chief administrative officer, denied that Rosenthal had attributed Hearne's leaving to anything BSA related.

"Well, that's just plain wrong," said Scott Steins, another member from AID and opponent of the conversion effort. "We know what we were told and we expect that the minutes of the meeting will show that."

But Carter added that the credit union was stonewalling the members on the meeting minutes. "It's really ridiculous," he said. "They are required to have minutes and they are required to share them with members."

NCUA would not comment on Rosenthal's alleged statement at the meeting.

If Hearne is on leave during a pending BSA investigation, that would resonate with what Lawrence Hart, a former Treasury official and, briefly, Lafayette's compliance officer, alleged after he resigned. Hart said he had been hired to help the credit union establish policies to strengthen its BSA compliance, but that he resigned when it became clear the CU was not going to follow his policies and that the BSA problems were remaining uncorrected.

The BSA compliance issue may also take on a different aspect as well since Hart has suggested the credit union's record keeping problems are so severe

that they call into question any attempt to audit a member petition by, for

example, comparing social security numbers since the CU may not have numbers on record.

Meanwhile the CU's performance continues sluggish as return on average assets dropped to 0.11% as of March 2007, according to NCUA records, falling steadily from 0.69% in March of last year. At the same time, both share and share draft deposits have moved lower and over $2.3 million of the CU's $19.1 million in member business loans were delinquent, $2.1 million of that being between two and six months overdue.

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