Proposed Minneapolis Credit Union May Be in Jeopardy

A proposed credit union to serve the black community in North Minneapolis that has been in the making since 2017 suffered a major setback after its executive director was ousted for alleged financial misconduct, mismanagement and gross negligence.

The board of directors for the Association for Black Economic Power that is organizing a proposed credit union, Village Financial Cooperative, made these allegations in a prepared statement released last week and reportedly turned over its financial misconduct allegations to Minneapolis police.

Moreover, the ousted executive director, Me’lea Connelly, claimed that she was fired because she reported racial discrimination, according to an article published by the Minneapolis/St. Paul Business Journal on Thursday. She alleged that the organization was “engaging in racially discriminatory behavior,” but she did not offer any specifics or documentation to back up her accusation, according to the media report.

On Friday night, however, Connelly told the Star Tribune that the ABEP board fired her after she complained about an alleged racial discrimination complaint involving Joe Riemann, the former CFO of the credit union who also was fired. Connelly told the newspaper that she is romantically involved with Riemann and that the board forced her to fire him “without cause,” and that staff complaints were about his “role being inappropriate because he’s not Black,” according to the newspaper report.

Connelly did not return a CU Times message seeking comment.

The ABEP board said in its statement that Connelly was terminated on Aug. 20, but the board’s statement did not report the termination of Riemann. That information appeared on local news media sites. In separate interviews with the Star-Tribune, Connelly and Riemann denied any wrongdoing, and the former executive director made no comments about alleged racial discrimination against the ABEP.

According to VFC’s IRS Form 990 for 2017, Connelly was paid $85,000 and Malcolm Wells, the board’s secretary was paid $445. Minnesota allows board members to be paid an hourly rate when conducting official duties. Riemann is not listed as a paid employee.

However, the proposed credit union paid more than $111,000 in management fees, more than $1,000 in management expenses and nearly $10,000 in legal fees, which accounted for more than half of its functional expenses of $213,000, according to its IRS Form 990. In 2017, VFC reported total revenue of $429,408.

VFC’s IRS Form 990 for 2018 was not available.

The ABEP board statement also does not report the current status of its charter application and it did not name a new executive director though its statement says “amid recent changes” the ABEP “forges forward with proposed black-led credit union.”

Several CU Times email and phone messages requesting comments from ABEP and VFC were not returned.

In March, Connelly reportedly told Minneapolis City Council that “they were moving through the process to become certified and nearly ready to launch,” according to the Star Tribune.

Minneapolis City Council pledged $500,000 to support the credit union’s operations, but those funds will only be disbursed if VFC meets milestones such as opening a branch by the end of this year, which is reportedly unlikely. In addition, the ABEP statement gave no indication as to whether it would be able to meet that goal.

Minneapolis Mayor Jacob Frey’s 2020 budget address on Aug. 15, just five days before Connelly was fired, announced the city planned to invest an additional $500,000 in the credit union.

“They’ve (VFC) signed up over 1,900 names for deposit and established themselves as a budding, community oriented financial option with over $5 million pledged, “Frey said in his proposed 2020 budget speech. “Let’s keep that momentum going. I’m honored to announce that we will be investing half a million dollars in the continued development of a transformational entity.”

Earlier this year, CU*Answers, a Grand Rapids, Michigan-based CUSO and VFC announced they will be working together in preparation for the credit union’s launch this summer by deploying the CUSO’s CU*BASE® core data processing suite.