Bureau of Financial Institutions: Do your job!
BFI Director Joe Face
Credit unions are financial cooperatives. They are owned equally by the members with a democratically elected board of directors - one member, one vote. The Virginia Credit Union (VACU) is a Community Development Finance Institution (CDFI) with a responsibility to invest federal dollars alongside private sector capital in the nation's most distressed communities.
Four outstanding Richmond community leaders and VACU member-owners filed paperwork by last year's deadline to run for the board in the March 23rd elections -- Frank Moseley, Kati Hornung, Richard Walker, and Tori Jones -- to bring a different direction, a different relationship with the Richmond community, and accountability for VACU's atrocious pandemic response to an out-of-touch board of directors that needs all three.
VACU's board not only refused to allow their names on the ballot, it didn't bother to interview or respond to the candidates. Instead the board held a Soviet-style "election" on March 23rd, with three board-chosen candidates running unopposed for three seats. You can read the full story here, and learn more about the candidates here.
VACU ignored our demand to hold a real election, just as it ignored the candidates who filed to run for board. Frank Moseley filed a grievance with the National Credit Union Administration, which reaffirmed the right of members to democratically elect their boards -- but crucially left it to the state administrator, Bureau of Financial Institutions Joe Face to enforce.
Joe Face has said he may bring this up to discuss with VACU staff -- in one to three years!
Tell BFI Director Joe Face that he has a job to do - enforce VACU's compliance with the law! We demand our right to vote at our democratically-owned credit union.
Will you sign our letter to Joe Face and share this petition with the people you know? Thank you!
Sponsored by
To:
BFI Director Joe Face
From:
[Your Name]
Virginia Credit Union (VACU) has removed its member-owners, the shareholders of the corporation, from any exercise of their legal rights to governance, oversight, and accountability of their credit union.
1. VACU has denied members and the public access to audited financial statements;
2. its board of directors has rigged their own election to prevent member-owners from contesting incumbents on the ballot; and
3. on March 23rd, VACU ran a pre-recorded online video broadcast in lieu of their statutory requirement to hold an annual member meeting (VA Code § 13.1-838).
This is unacceptable. Without oversight by and accountability to member-owners, the board and CEO of VACU are operating the members’ $5 billion cooperative financial institution outside of lawful governance or appropriate controls designed to prevent abuse and malfeasance.
Member-owners have seen what happens when a credit union's leaders set themselves up as lords of private fiefdoms. On April 20th, the former board chair of Municipal Credit Union, New York State's oldest credit union, was sentenced to 15 months in prison for her role in covering up the CEO's years-long embezzlement scheme, ultimately defrauding members of over $10 million. Before her conviction, she had been a judge on the New York Supreme Court.
The temptation to embezzle or misappropriate members' funds is too strong when tens of millions of dollars are flowing by with no oversight and no accountability. If that temptation can even corrupt state supreme court judges, how are lesser mortals supposed to withstand it?
The only solution is to ensure that there is ALWAYS rigorous oversight and accountability by member-owners -- the shareholders of the business -- and an invigorated state regulator that is responsive to the urgent needs and interest of the public and member-owners. Only this can remove the temptation to financial impropriety by precluding insiders from ever imagining that they could get away with it.
You have done the opposite. By failing to act on the earlier governance complaint, you have sent the message to VACU that they are beyond the reach of their member-owners, the shareholders of the business, and above the law. You are sending the message that, instead of enforcing the law, Virginia's state regulator will protect VACU from the law.
It is not acceptable to create the conditions necessary for abuse to occur and then act surprised when it happens. It is not acceptable for VACU to operate without the minimum necessary and proper controls, oversight, and accountability to member-owners, putting members' $500 million in equity and $5 billion in assets at risk. Proper controls, including robust democratic governance and member oversight and accountability, must be in place at all times.
I and my fellow member-owners of Virginia Credit Union call on you to immediately force VACU back into compliance with the law and with VACU's charter and bylaws by issuing an order no later than May 27th ordering VACU to convene, between 30 and 60 days from the issuance of the order, a proper annual member meeting, in which:
- there is a proper and convenient meeting place and time where member-owners shall meet in person;
- members will receive proper notice of the meeting, election, and candidates, using at minimum the credit union's email and online banking messaging capabilities;
- VACU’s audited financial records will be posted online in the same location as the annual report, and their availability will be included in the meeting notice;
- the meeting will be properly conducted under Robert's Rules of Order and VACU's bylaws;
- member-owners are able to vote on the agenda and propose new business, as required by VACU bylaws;
- member-owners are able to speak and will be given time to address the board and each other;
- VACU's directors and CEO will answer questions asked by member-owners;
- a true election will take place, with all candidates found to be qualified by the Nominating Committee appearing on the ballot, including Frank Moseley, Kati Hornung, Richard Walker, and Tori Jones;
- a remote participation option, including voting, is provided to members who are unable to attend the meeting in person and/or are unavailable to vote at the time the meeting is scheduled;
- the list of eligible members to vote is provided to members in advance upon request, per VA Code § 13.1-845, and posted at the location;
- VACU properly verifies that only member-owners are able to vote;
all other applicable statutes and bylaws are followed appropriately; and
- VACU will be expected to conduct annual member meetings and elections under the same requirements each year, moving forward, with BFI enforcing compliance.