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First Basin member seeks regulator intervention
ODESSA, Texas (6/10/08)--A member of First Basin CU has sent a letter to the commissioner of the Texas Credit Union Department, requesting that a state examiner investigate the April annual meeting of the credit union in which three incumbent directors’ were re-elected. The commissioner also is being asked to investigate the credit union’s earlier attempt to convert to a mutual savings bank. The five-page letter to Commissioner Harold Feeney also was sent to Texas Gov. Rick Perry, Texas U.S. senators, several state legislators and the National Credit Union Administration, among others. In her letter, Karen J. Howard-Winters outlines several points in her complaint against CEO Shem Culpepper and the board of directors of the $115 million asset, Odessa, Texas-based credit union. She alleged that they:
* Withheld important information regarding the election on the meeting notice postcard; * Did not allow conversion opponents to distribute documents outlining their concerns; * Did not allow the opponents to speak during the meeting or to refute claims made that they were influenced by an outside organization formed as a resource to help small credit unions protect themselves against predatory leadership aimed at insider enrichment; * Appeared to be “stacking the deck” with votes from employees and their families; * Spent First Basin funds for a parliamentary attorney who did not contribute to the fairness of the election; and * Spent First Basin [funds] to hire a firm already on the payroll and not a neutral third-party, to count ballots.
The day before First Basin’s annual meeting, the group opposed to the earlier conversion attempt petitioned the courts, seeking depositions from key officials of the credit union (News Now April 15). The depositions related to a potential claim of defamation and breach of fiduciary responsibilities, said the court document. However, a suit was not anticipated at that time. The group announced at a press conference at the Ector County Courthouse that it filed the petition because the credit union had spent roughly $500,000 “of member-owned funds trying to convert” the credit union to a mutual savings bank earlier this year. In an April 8 letter, The Texas Credit Union Department responded that it did not believe it would be appropriate at that time “to insert itself into the credit union’s election process.” The letter, written by Feeney, continued: “Dispute resolution involving an election process is a specialized field. People in this type of dispute resolution generally have undergone extensive training, and depending on the dispute in question, have experience in the field. Examiners are experts in their field, but have not undergone training in dispute training. “While the department declines to send an examiner to observe the proceedings of the upcoming meeting, the department will continue to monitor this situation and will take appropriate action should it be determined necessary,” the letter added. A call to First Basin was not returned to News Now by press time. For more information, use the links.


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