Members Turn Out in Droves to Debate Failed Lafayette FCU Conversion

Credit Union Journal   May 21, 2007

ALEXANDRIA, Va. – Record numbers of Lafayette FCU members turned out for Saturday's annual meeting to discuss whether opponents of the failed conversion to bank will get a foothold on the Lafayette board, but one prominent members was missing–President and CEO Michael Hearne. Hearne, who engineered the would-be conversion, has been put on indefinite leave and replaced by an interim CEO while NCUA investigates allegations of money laundering violations at the $335 million credit union, the more than 2,000 members who jammed into the Army-Navy Club were told. The huge crowd contrasted with a December special meeting to culminate the 90-day ballot on the conversion attended by fewer than 70 members. The ballot, which resulted in a narrow vote in favor of the switch to bank was subsequently withdrawn and the conversion abandoned when NCUA uncovered irregularities in the voting. Each of the candidates for the three board seats–including two representing opponents of the conversion–were allowed to address Saturday's meeting, where many members criticized the credit union's secretly adopted bylaw that disenfranchises thousands of overseas employees of US Agency for International Development, the credit union's main sponsor group, by requiring in-person voting. But representatives of the conversion opponents, including a long-time USAID employee, were defeated in their bids for board seats, with two new credit union members appointed a few months ago to the board, winning by narrow margins.

© 2007, Used with permission from The Credit Union Journal. All rights reserved.