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Credit Union faces lawsuit, broke bylaws, member says

by: SPOTLIGHT PHOTO: KATIE WILSON - St. Helens Community Federal Credit Union CEO Brooke VanVleet in the credit union lobby at the St. Helens location.A Scappoose man has filed a federal lawsuit against the St. Helens Community Federal Credit Union, saying the financial institution violated its own bylaws when it held a special meeting last year.

Steve Knebel, who owns Oregon Indoor Organics in Rainier, said he doesn’t have anything to gain from the lawsuit. He wants to put the matter before a judge to decide between him and the credit union.

“I’m doing this because they broke the law,” he said. The credit union has until March 1 to respond.

Knebel is seeking a ruling that the recall election was valid and the five directors up for recall should be removed.

Knebel was part of a group that started a recall petition following an annual meeting in June when then-CEO and Board Chair Charlotte Hart said the credit union was not discussing merging only to announce several days later that the credit union had already, in fact, signed an agreement with Wauna Federal Credit Union to begin preliminary merger talks.

Knebel and other members began circulating a petition to recall five of the credit union’s seven volunteer directors, saying they were concerned about how the credit union was being run. Hart, who was not re-elected, was replaced as CEO by Brooke VanVleet.

VanVleet had originally been hired to broker the merger between St. Helens and Wauna, but amid a firestorm of accusations and confusion she announced the merger would not go forward and tabled the discussions. She re-negotiated her contract with the credit union and has stayed on as CEO.

The recall effort culminated in a special meeting Sept. 4 and members were given a chance to vote to retain or recall each of the five directors. However, Knebel argues the credit union violated its bylaws by allowing absent members to vote by mail-in ballots. He says the bylaws only allow this for members who have specifically requested absentee ballots. Instead, the credit union sent out a mailer with a ballot to every one of its 15,000 members.

The five directors — Marty Borrevik, Lea Chitwood, David Graham, Mike Hafeman and Richard Louie — kept their seats. The credit union would not release the final breakdown of the votes and it is unknown how many members voted for or against each director.

Knebel said these mail-in votes should be considered ineligible. He believes the directors would have been recalled if the credit union had only counted votes from people present at the special meeting and mail-in votes from members who had requested absentee ballots.

Knebel also said VanVleet tried to do her best to fix the outcome of the election through letters and announcements to credit union members.

In a letter to members prior to the special meeting, VanVleet wrote, “While respecting the members’ rights to voice their opinions through this process, I strongly advise you that an unwarranted and impulsive recall at this time will be disruptive to the credit union.”

“The ineligible votes were illegally solicited and unduly influenced with the specific intent to fix the election outcome with the improper use of membership funds,” states the document Knebel filed in district court Feb. 13.

VanVleet has stood by the credit union’s process. She said she is aware of the lawsuit, but would not discuss it except to write in an e-mail to the Spotlight that “after careful review, the credit union wholeheartedly believes it is without merit.”

She added that “every financial institution addresses legal issues as a normal course of doing business, sometimes as plaintiff and sometimes as defendant.”