BERKELEY -- Members of a 71-year-old "socially responsible" credit union here settled an unusual boardroom power struggle Tuesday night by voting to reinstate three directors who were suspended in November amid allegations of wrongdoing.
The vote to retain the three suspended directors was seen by some as a new direction for the Cooperative Center Federal Credit Union to make more loans to cooperative businesses, small traditional businesses and nonprofits rather than focusing on home and auto loans.
"The people who showed up to vote were basically old hippies like me," said 62-year-old Scott Wheeler, who has been a member of the credit union for 38 years. "It was a bizarre proceeding. The whole meeting undermined the accuser's credibility right out of the gate."
In an email, CEO Fadhila Holman, who has worked in the industry for more than 20 years, said the suspension of board members and the vote to reinstate them were "a first for me."
Holman acknowledged there has been some discord in the institution.
"It is my biggest hope right now that the credit union and its membership will move past the special meeting and find ways to resolve the issues and move forward," she said.
The credit union, whose letterhead says it is a "nonprofit, socially responsible financial cooperative," was started in 1942 to serve members and employees of the Consumers Cooperative of Berkeley grocery stores, which have since gone out of business. The credit union now has 13,000 members and more than $100 million in assets.
In three separate votes, members voted to keep Directors Tim Huet, Mike Leung and Tye Kirk, who were suspended Nov. 21 by the credit union's supervisory committee for attempting to remove the two other directors, attempting to hold board meetings without giving other directors notice, and breaching fiduciary duties, according to a letter to members from supervisory committee Chairwoman Patricia Pitre.
"I showed up to this meeting to vote Tuesday night not because I was a supporter of the three directors, but I was alarmed by the letter, because I read between the lines and it looked like a smear," Wheeler said.
Kirk, who was elected to the voluntary board position in 2011, along with Huet and Leung, said the three originally ran for the board as a slate to "bring the credit union back to its cooperative roots and its namesake."
Kirk said he wants the credit union to make more loans to cooperative businesses, small businesses and affordable housing developers.
"They have focused mostly on consumer and auto loans in the recent past," Kirk said. "That's a great space, but it's harder to do member business loans. A lot of credit unions don't do that because it's risky. Cooperative business and housing is seen as an alternative business entity, and a lot of big banks won't do that."
Holman said the credit union has about $50 million loaned out to members, and she confirmed most of it is in home and auto loans, with just $1.5 million in student loans and $1.9 million in small business loans.
She said the credit union's loan portfolio is a reflection of what members "need and want from us," but at the same time "board members have expressed a desire to assist small businesses in our area with lending needs, and the credit union management has taken steps to do that, incrementally," while trying not to take on too much risk.
Contact Doug Oakley at 925-234-1699. Follow him at Twitter.com/douglasoakley.