Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive

News Now

CU System
CU files lawsuit vs. dissidents in conversion attempt
ODESSA, Texas (7/24/08)--Members of First Basin CU expressed disappointment and outrage at the credit union's lawsuit against six members who opposed its bank conversion plans as well as the National Center for Member Trust and Durham, N.C.-based Self-Help CU. The Odessa, Texas-based First Basin filed the lawsuit July 14 alleging that members of Save First Basin, a conversion opposition group of credit union members, "tortiously" interfered with the its attempts to convert by disseminating false information to other members, the public and the media (Odessa American July 22). The suit says the defendants or "individuals at their discretion" contacted and warned members they would lose their deposits and their accounts would be closed; and that the officers and directors had a conflict of interest and would make money in the conversion. It seeks $600,000 in damages, primarily from the two organizations, and permanent injunction against six members. "We have not been served the papers but are aware of it," said Randy Chambers, board member of the National Center for Member Trust, Wednesday. "It's outrageous that a credit union CEO is attacking its members for engaging in free speech and rights they have under National Credit Union Administration (NCUA) regulations and the U.S. Constitution," Chambers told News Now. "Members have a right and an obligation to determine whether their credit union becomes a bank. This goes beyond the pale." Chambers said the center will "vigorously defend the members. They’ve been given a slingshot to fight with against a bazooka, and the credit union continues to fire bazookas," he added. Danny Armstrong, a school teacher and one of the members named as defendants in the lawsuit, told News Now he was served with papers last week and was "amazed that it's gone this far. "This is our credit union. My institution is suing me for letting people know that what the leadership was doing was not in the best interest of the members," Armstrong said. He noted that the credit union spent about $600,000 in its campaign to encourage members to vote for the conversion. "I'm still a member. I still believe strongly in that credit union. But I feel that in the past five years, it has taken a wrong turn," Armstrong said. He criticized its plans to get more into business lending, saying its directors had "lost sight of what they're there for--for the members." "I'm disappointed it's come to this. As an owner and member, I don't appreciate my assets used against me and wasted." Although he was worried about his family and protecting his assets, he is open to a countersuit. "I'll play it to the bitter end. I'll counterfile," he said. In addition to the two organizations and Armstrong, defendants named in the lawsuit are Letty Ayala-Moreno, Carol Uranga, Sylvia Acosta, Manny Puga and Armando Rodriguez.


RSS print
News Now LiveWire
Hope FCU 'exceptional' in minority service: @GOBankingRates.com #NewsNow http://t.co/yp1JsKmGo0
1 hours ago
.@wpcu in the running for Dayton Brand Madness 2014 @DBJnews http://t.co/waOSDAGUtr
1 hours ago
.@NW_Banking looking for #creditunion entries for #CUFinLit contest to fund through http://t.co/E6GFvjd5XW
2 hours ago
#NewsNow: Fannie Mae, Freddie Mac consider VantageScore for alternate credit model. http://t.co/611II7AcKD
3 hours ago
Va. #creditunion league breaks ground on new HQ #NewsNow http://t.co/Cn24i1hOHV
4 hours ago