Corrected Version-Defend Democratic Control at the Cooperative Center Federal Credit Union

Since I wrote this article 3 weeks ago (September 30, 2014), I have obtained new information and I wish to correct some of the statements in the original version of the article. I worked with the information available to me at the time I wrote the original article. Some information that I need to verify aspects of the original version of the article is either unavailable to me or is confidential under credit union rules and since I don't have access to any confidential information, I decided to make the following modifications to the article.

On October 21 I emailed Indybay and requested that they make corrections to the article, but they told me that authors cannot edit the articles. Indybay hid the original version of the article. I didn't ask that they hide the article. Following is a revised version of the article. I deeply regret the errors in the original version of the article:


The struggle over control of the board of directors of the Cooperative Center Federal Credit Union in Berkeley is continuing. Although the word *cooperative* is in the name and the credit union was originally set up as an alternative to regular banks, for many years CCFCU has fallen short of its potential. It functions more or less just like a regular bank and has refused to make loans to either cooperative businesses or cooperative housing. Both types of coops have found it almost impossible to borrow money from traditional banks because of bias against coops.

Many members of the CCFCU who deposit their money at the credit union wish the credit union would pool their resources and use their money (in a safe and financially responsible way and complying with all regulatory requirements) to make sound loans to local coops and other alternative efforts.

Although CCFCU's bylaws require annual elections, a small clique has controlled the organization for years, with very little member participation in elections. Moreover, the credit union hasn't made information about its governance and affairs available to members. Basic documents like the credit union's bylaws have not been on the CCFCU website. This lack of transparency has frustrated member engagement and involvement in their credit union. Lack of information and openness contributes to the way members are treated like consumers, rather than owners.

Three years ago, the credit union finally held a contested elections with voting by ballot and members of the credit union overwhelmingly -- by a 3 to 1 margin -- elected three new directors (Mike Leung, Ty Kirk and Tim Huet) who ran on a platform of getting a loan program for cooperatives implemented.

Finally, there was a breath of fresh air at CCFCU.

Well, not so fast. [Note: the following 3 paragraphs have been corrected.] While the coop slate held a majority on the board following the election, they met resistance. During the fall of 2013, a complaint to the supervisory committee lead to suspension of all three pro-coop directors on charges that they had violated credit union rules. At a meeting in December, a huge crowd of credit union members turned out and voted 3-1 to reinstate the pro-coop directors, despite fear-mongering and accusations such as that the government would shut the credit union down if the three board members were re-instated. An audio file of the meeting is available here http://youtu.be/sXMDhWxk1Fc that contains these statements. A comment will be posted to the Youtube file describing which minutes of the audio of the meeting are relevant. Meanwhile, a nominating committee was not appointed in 2013 for a board election and the credit union didn't hold elections for the two other board members whose terms expired in 2013.

In the latest chapter, during the summer of 2014 the credit union's nominating committee did not nominate 2 pro-coop directors who applied to be nominated for the November, 2014 board election. The nominating committee was appointed by the Board Chair James Garrett. Contrary to the earlier version of this article, the nominating committee was an independent committee and not controlled by him. The reasons for the failure to nominate the sitting board members are in dispute and I do not currently have access to this information due to confidentiality rules. One reason claimed is because applications for nomination were were incomplete, which is disputed by at least one of the pro-coop directors who was not nominate (Mike Leung).

For regular members concerned about the suspension of Tim Huet, Tye Kirk and Mike Leung in 2013, it came as a shock when the coop sent out a "Notice Regarding Election of Board of Directors" that didn't contain bios from the pro-coop directors, because they hadn't been nominated. NOTE: the previous version of this article incorrectly stated that the Board Chair Garrett selected the candidates who were nominated by the nominating committee. In fact, the nominating committee decided who to nominate based on numerous applications from credit union members.

The November election is particularly important because the size of the board has been expanded from five to seven directors, and ALL SEVEN directors are up for election since the terms of all currently serving directors has expired. The future direction of CCFCU hangs in the balance.

Since the "Notice Regarding Election of Board of Directors" was issued in mid-September, two of the three pro-coop directors have formed an election slate called "Democratize CCFCU" composed of Mike Leung, Ty Kirk, as well as public interest attorney Sushil Jacob and the author of this article, cooperative attorney Jesse Palmer. If elected, they will advocate the following policies for the credit union:

-- begin a program at CCFCU to make sound, safe, financially responsible loans to local coops and other alternative efforts that support the community. Loans would comply with all regulatory requirements and be secured with adequate collateral or guaranteed by persons with sufficient assets.

-- respect member control of the cooperative by having elections when terms expire.


-- make functioning of the credit union more transparent to its members. 

-- engage rank and file members in the day-to-day life of the credit union and treat members as owners, not passive consumers.

-- represent ALL members of the cooperative equally and respectfully.

-- make financial stability and efficient operation of the credit union a top priority.

If you are a Cooperative Center Federal Credit Union member, you can vote for the Democratize CCFCU slate when ballots are mailed to you.

For more information including a timeline of events over the last 3 years that is more thorough than this article, check democratizeccfcu.wordpress.com

This article is the opinion solely of the author and is not authorized by CCFCU, its board or any individual director, or Democratize CCFCU.