Conference 7.286::dcu

>The Special Meeting
>
>    He said that we would be receiving notice of the Special Meeting very
>    shortly. When reminded that the meeting was to be held within 30 days
>    of the submission of the petition, he said simply: "that isn't true."

From the DCU Charter Bylaws, Article V, Section 3:

	"Special meetings of the members may be called by the executive
	officer, or by the supervisory committee as provided in these
	bylaws, and may be held at any location permitted for the annual
	meeting.  A special meeting shall be called by the executive
	officer within 30 days of the receipt of a written request of 200
	members.  The notice of such special meeting shall be given as
	provided in section 2 of this Article"

Section 2 describes that "7 days before the date of any special meeting of
the members, the secretary shall cause written notice thereof to be
handed to each member in person, or mailed to each member at his/her address
as the same appears on the records of this credit union."

Seems pretty clear that they must have this meeting by the 17th of October,
and that they must put the notification in the mail by the 10th.  Note that
this is going to be a potential problem as people will not receive their
notification in the mail until the 15th or 16th.  The 10th is this Thursday,
the following Monday (argh!) is Columbus Day and the post office is closed
since it's a federal holiday.    And I suppose there's nothing to prevent
them from mailing the stuff to "GMA" from Anchorage Alaska so as to further
delay the notification from reaching us.  Of course, now I'm getting entirely
paranoid and unreasonable.

It should be interesting to see what happens!
/Chris

   Unfortunately, the  bylaws  say  the  special  meeting  *must be called*
   within 30 days.  Does that mean "held" or merely "scheduled"?  According
   to  another  note in this file, Chuck was of the opinion that it must be
   "held".   Then the famous BoDs meeting happened.  Then Chuck changed his
   tune to must be "scheduled".  

   However, the  NCUA general counsel does not agree.  PG talked to him (in
   DC)  and  I spoke to an NCUA official in Albany and they both are of the
   opinion  that  the  meeting  must  be *HELD*.  So, if the meeting is not
   scheduled properly in 2 days (Oct 10), it's time to formally complain to
   the  NCUA.   Again, if they schedule it for sometime next year, that's a
   violation.  But if they schedule it for the next several weeks, the NCUA
   probably wouldn't act before the meeting happened.

   I think  the BoDs know they are dead meat if they hold that meeting with
   enough notice and convenient enough that all the people who want to come
   can  come.   How  much  you  want  to  bet  the  meeting  will be in the
   Berkshires? 8*)

Re: .0
>>    Chuck said the new policy has been instituted because he is inundated 
>>    with requests for information from a "very small number of members," who

   I'm sorry  to  have to be so strong, and I was hoping to see better from
   the  new  prez, but there's no other way I can put this: I believe Chuck
   is blatantly lying.

   1) Granted, PG and I (and probably a few others) have asked for a number
   of  things,  but  it's  hardly  an  "inundation".

   2) PG has been waiting for some info from last August.  How long does it
   take  to  copy  a  page  or  2  of an auditor's report (unrealisitically
   assuming  of  course that they intend to give us the auditor's report as
   requested) ?

   3) DCU  has been denying our request for certain documents (BoD minutes,
   etc.)  since  requested.  How long does it take to stamp "denied" across
   every  request  we  have?  They're  not evaluating every request fairly,
   they're  just  dogmatically  rejecting everything.  I'm sorry, this just
   doesn't take very long.

   4) I  have  no  data to back this one up, but I don't believe that Chuck
   rules  on  each  request for info.  I bet somebody at a much lower level
   can decide to deny information.

   I was  hoping  that  the  new prez would be better than this, that maybe
   he'd  take  this  opportunity  to  distance himself from the BoD.  I was
   hoping that maybe he was just gritting his teeth and merely implementing
   what  he  was forced to implement by the BoD but no more than he had to.
   From the above statement, it really looks like he's backing the BoD more
   than  the bare minimum necessary to keep his job until we can bring down
   the BoD.

   He could  have  just  said "that's the new policy and the BoD is my boss
   and I have to do what they want". But he didn't. I'm disappointed.

    In the latest "Network" Chuck indicated he wanted to open up
    communication.  He even gave his DTN if you want to reach
    him.  Then, here I read that he doesn't want to be inundated with
    requests for responses.  This does appear to be, um, inconsistent.
    
    But, I'm going to write here in Chuck's defense.  Since writing the
    article for "Network" the BoD has apparently been gagging Chuck.  I
    think that he really does want to communicate.  But, the BoD does not
    want communication.  
    
    They have reasons for this.  After all, letting one DCU member hand-copy
    auditor's notes from the last annual report proved devastating.
    And, as others have pointed out, there's a lot more information (like
    BoD minutes and other auditor's notes) that has not been generally
    released.  One could speculate that these could provide further
    devastation to the "stability" of things. 
    
    We can easily get around the arguements Chuck gave.  For example, we
    could have lots of different folks contact MM directly, pay her money for 
    her time and each request different pieces of material.  Then what
    would happen?  Do you really think that the BoD would increase the
    approval rate for releasing documentation?  Well, I don't think so.
    
    I think Chuck offered the best reasons he could think of for
    restraining the release of information.  He has to.  He's been placed
    under a gag order but he still believes in trying to open up
    communication.
    
    I hope a new BoD will let Chuck act without apparent hypocrisy.
    
    Steve

>    Unfortunately, the  bylaws  say  the  special  meeting  *must be called*
>    within 30 days.  Does that mean "held" or merely "scheduled"?  According
>    to  another  note in this file, Chuck was of the opinion that it must be
>    "held".   Then the famous BoDs meeting happened.  Then Chuck changed his
>    tune to must be "scheduled".  

As I've said before, there are many ways that the BOD can avoid
the special meeting:

1.  the bylaws are changed - somehow,

2.  there is another intepretation of the bylaws such that the
    meeting does NOT have to take place within 30 days.  In any
    contract, there can be more than one intepretation,

3.  the bylaws are NOT followed and special dispensation is approved by
    NCUA or some other relevant bodies.

There are probably more ways that I haven't thought of yet.  I hope  I'm
wrong on the above.


Gim

Re: Chuck...   

   My point  was that he could have told the truth - the BoD has gagged him
   -  rather  than what he said which implies he think's it's our fault the
   policy  was  implemented.   I  maintain that if he said the latter, he's
   lying.

Re: .5, 30 day interpretation

   The bylaws  can be changed by a vote of the BoDs but must be approved in
   writing  by  the  NCUA  before  the change can become effective (Article
   XXI).   I  doubt  they  could  get  the  change done fast enough and the
   special  meeting  process  is  in progress.  Besides, we could swamp the
   NCUA with complaints over this legal maneuver.

   Also, the  DCU  has  to  answer  to  the  NCUA and we've got it from two
   different  places  in the NCUA that the meeting must be *held* within 30
   days.

   Again, the  bottom  line for me is that I'm pissed enough to do whatever
   it  takes  to  bring  down the BoD no matter what obstacles they put up.
   And  if  I  decide  to run for BoD (it'll depend on how I feel about who
   else is running mostly) and win, they will have an audit of a depth they
   have not seen before.  The harder they fight, the more apparent it is to
   me  that  they have something to hide.  I may not be able to do anything
   about  the rest of the banking industry, but I can help fix *our* credit
   union.

   If the  BoD  had  come  clean  last  spring,  I  bet none of us would be
   involved  to  this  extent and the BoDs would still have their seats for
   whatever reason they still want them after all this hassle.  If I were a
   BoD  member  and was being hassled this much, I'd gladly resign.  I have
   more  important  things to do than get all the aggravation we're causing
   for volunteered hours.

    I basically agree with Paul.  I would like to point out that it is a
    standard political maneuver to "make up new commandments" when you're
    taking the heat on something that you can't defend.  That's just
    politics and that's the game that CC has to play to defend the BoDs
    decision to limit the release of information.  Once we get around the 
    current smoke, I expect more "new commandments".  Don't blame CC for
    this, IMHO.
    
    Steve

	Re: .6

	If changes to the by-laws has to go through the NCUA, they are
guaranteed to have a copy of the latest and greatest legal by-laws for DCU.
Getting a copy of the by-laws from the NCUA would then establish the official
by-laws that DCU is (or should be :-) operating under.  Using copies obtained
from DCU in anything but the most immediate timeframe might not include any
recent changes.  (Hmmm, comparing the official by-laws from the NCUA and the
latest-and-greatest set from DCU might prove interesting.)

								-c

>
>   Also, the  DCU  has  to  answer  to  the  NCUA and we've got it from two
>   different  places  in the NCUA that the meeting must be *held* within 30
>   days.

Ah... A question I do not recall anyone asking...  Exactly what do you expect
the NCUA to be able to do?  Impose a fine? Guess where the money would come
from.  Slap on the wrist?  Specifically WHAT penalties are there if the
special meeting is not held when it should be?  Exactly what control DOES
the NCUA have over DCU?

-Joe

   I don't know if the NCUA opinion is posted in this notes file.  I know I
   called  Albany  NY  myself, and I know PG told me that he called Wash DC
   asking  about  the  30 day interpretation.  Their interpretation, again,
   was *held* not *scheduled*.

   My understanding  is that NCUA has complete regulatory power over credit
   unions.   I  believe  they  can  disolve the board and the entire credit
   union  but  I  can't remember specifically where I heard this info.  But
   I'm  just  as  sure  they  don't  like to get involved.  They need to be
   called in to do something by complaints.  They've got mine already about
   the lack of information.

I called the office NCUA and spoke with a Sal Chriscion. Here's what I
found out:


1.  the NCUA's intepretation is that the meeting must be held within
    thirty days.  

2.  I asked about penalties. There isn't any. The NCUA will, however
    investigate.

3.  Is the BOD likely to be removed as a result of this investigation?
    The answer was unlikely.

4.  What would happen if the meeting were held after the 30 days period?
    The special meeting could be invalidated.

5.  How could the 30 days requirements be enforced?  Request in writing
    an intepretation from the General counsel in Washington, DC.

Gim

Does point #4 in .11 concern anyone else?

The BoD explicitly violates the NCUA's interpretation by holding the meeting
after 30 days.  They wait to see what happens at the special meeting.  If they
get voted out, they invoke whatever .11's point #4 is based on and invalidate
the special meeting, and therefore its outcome.

It would be an admission of fault on their part (for holding the meeting after
the 30 day period), but it'd also keep them in office a bit longer.

>Does point #4 in .11 concern anyone else?
>
>The BoD explicitly violates the NCUA's interpretation by holding the meeting
>after 30 days.  They wait to see what happens at the special meeting.  If they
>get voted out, they invoke whatever .11's point #4 is based on and invalidate
>the special meeting, and therefore its outcome.
>
>It would be an admission of fault on their part (for holding the meeting after
>the 30 day period), but it'd also keep them in office a bit longer.

Well, they could get "cute" and do some wrangling of that sort to try to keep
a lid on.  But I believe that if they did this, it would only strengthen the
case for those of us who want to get rid of the board.

Their best defense would have been to call the meeting as soon as it was
possible to do so.  In so-doing, they could have pointed out that they were
having the meeting immediately to clear the air and get back to business.

IMO, the longer they delay the worse they make themselves look.  A long wait
gives people plenty of cause to fret and worry (and post a lot of notes :-))
about everything.

/chris

>	How  much  you  want  to  bet  the  meeting  will be in the
>   Berkshires? 8*)

		My money says Nantucket.

				Tom_K

    Well, if I don't get notification of the meeting in the mail by Friday,
    I'm sending a complaint to the NCUA.  I should get notice of a meeting
    on October 17 by tomorrow, but by waiting until Friday I allow the
    typical one-day delay of mail between Maynard and Marlboro.  If I don't
    hear by Friday, they have either violated the 7-day notice rule or the
    30-day rule.  Either way, they are in violation, IMHO, and I'll let the
    NCUA know. 
    
    I would not be surprised if an effort is made to invalidate the special
    meeting by citing that it took place after the 30 days.  But, it seems
    to me that a complaint filed before the meeting concerning the delay 
    probably would carry some weight, especially if the BoD is documented
    through complaint as having been in violation as soon as the violation 
    occurs.
    
    Steve

    Does NCUA have any real power over DCU?  When Barnstable was closed
    down, did NCUA came in with the armed guards?  My impression was that
    NCUA was funded by credit union industry and it does not have any
    legal authority.
    
    - Vikas

Re:  .15

Steve...the bylaws are clear that "the secretary shall cuase written notice
thereof to be handed to each member in person, or mailed to each person at
his/her address..."

Now, I'm not a lawyer (but I play one on TV...), but my interpretation is
that the notices don't have to be mailed until the 10th.  That being the
case, they're gonna be arriving 1-2 days before the meeting, or on the
meeting date itself.  But, it's within the bylaws to do that.

/chris

             <<< Note 306.16 by HELIX::SONTAKKE "Vikas Sontakke" >>>
>                               -< Call in Feds >-

>    Does NCUA have any real power over DCU?  

	According to the little card in the CXO branch, NCUA is an
	"Agency of the U.S. Goverment".

	They ARE the Feds.

Jim

        re: .13 and .14
        
        You are both wrong. The meeting will be held on DCU property, out
        on the cape, on some of our wonderful swamp land :-)
        
        I just saw this is an internet .sig file a couple days ago. It
        seemed appropriate to repeat here:
        
        "The more corrupt the state, the more numerous the laws."
        Cornelius Tactus

    Okay,  At VERY MOST it should take 3 working days to send a letter from
    Maynard to Marlboro.  So, shall I wait until mail is delivered on October 
    14 before sending my letter to the NCUA?
    
    Steve

    
    Mine is going out tomorrow. Anyone with half a conscience would have
    made sure that the meeting was scheduled by the 17th, and that
    notification was in the hands of the members by today.
    

    
.0>    Chuck said the new policy has been instituted because he is inundated 
.0>    with requests for information from a "very small number of members," who
.0>    call week after week. 
    
    This is a lie.  They have only 2 requests for information, from me
    anyways:  1. Auditor's notes for 1985-1990 and 2. Auditor's report of
    election results from 1988-1991.  These were requested long before this
    new policy and have been withheld.  Again, what business value do
    election results hold and why are they being denied?
    
    >He said that he's too busy trying to improve the
.0>    Credit Union to spend his time handling such requests, and whoever else
.0>    handles them has to be paid, so the member who requests the information
.0>    should have to pay for it. Otherwise, those people who ask for 
.0>    information are being subsidized by the general membership (something
.0>    to that effect). 
    
    Thank you for saving us money DCU.  I'm *sure* that is the reason for
    the withholding of this information.  Yes, the people who care enough
    about the credit union to ask for information are working against the
    general membership and are leaches costing the credit union money. 
    This is an attempt to turn members on members.
    
    Besides, we're already paying Mary Madden's (and others) salary.  They
    were there before we started asking for any information.  Sorry we are
    now asking them to do their job.
    
    >I said it shouldn't matter if only one person wants 
.0>    information to which members are entitled, it should be readily 
.0>    accessible, but I don't think that made much of an impression. Chuck is
.0>    generally very cool, but he got a bit flustered on this subject. 
.0>    When I asked who had formulated the new policy (i.e., was it him), he 
.0>    replied (this is a direct quote):  "That's none of your business." I 
.0>    thought that was a bit ironic in light of his desire to communicate 
.0>    openly and honestly, so when pressed, he admitted that the BoD had 
.0>    approved the policy, and he was implementing it. But he wouldn't say
.0>    who had formulated it, if it matters. 
    
    "That's none of your business."  Gotta love it.  Seems nothing is our
    business according to DCU.  Unbelieveable.

.0>    Chuck continues to assert that increased fees would eventually have been
.0>    required in order to improve the C.U.'s profitability, regardless of the
.0>    Mangone fraud. He wants to improve the capital ratio from the current
.0>    �4.5% to as much as 8%. At one point, he even stated that the fees "have
.0>    nothing to do with the fraud." So he was reminded that in his first 
.0>    meeting he had stated that the writeoffs from the fraud had reduced the 
.0>    ratio by about 1%. Now it needs to be increased. So how can they be
.0>    unrelated? By the way, he said that they were unrelated immediately
.0>    before restating his priority to "openly and honestly" communicate.

    Baloney.  DCU made over $4 million last year off of us.  Unfortunately,
    the BoD lost it on their "conservative investments".  And and *8%*
    capital ratio?!  People, to achieve this DCU is going to need to
    generate a LOT of money in fees.  They had 6-7% before.  If he now says
    8%, then DCU will truly become "Fees are Us".
    
.0>    He also reiterated the rationale for assessing fees on checking accounts
.0>    without acceptable balances: they are unprofitable, so depositors with
.0>    profitable accounts are subsidizing them. 

    Again, an attempt to turn members against members.  Many members use
    their accounts wisely.  They also have numerous accounts, which DCU
    encourages.  Now these members are told they are unprofitable.  A basic
    rule of operations seems to have changed here.  That checking accounts,
    in and of themselves, must be self-sufficient.  That is ridiculous and
    short-sighted.  A business does not sell everything for a profit or for
    the same profit margins.  I contend that DCU offering basic free
    checking is a net GAIN for DCU, and it's members alike.
    
.0>Improved Controls:
.0>    
.0>    Chuck repeated his strategy for tightening internal controls in order to
.0>    prevent any reoccurrences of fiascos such as the Mangone fraud.
.0>
.0>    - Appoint an internal auditor to report to the Supervisory Committee
.0>    - Work closely (personally) with the Supervisory Committee so that
.0>      they understand how to effectively monitor C.U. operations
.0>    - Replace the external auditor with one that is experienced in auditing
.0>      credit unions
.0>    - Use a general counsel answerable to the C.U. membership, not the Pres.

    These are particularly funny at this point in time.  I have been trying to
    reach the people that are supposedly on the Supervisory Committee of
    DCU and have been told this committee hasn't meet since the early
    eighties.  In fact the people listed as members on it may not even know
    that they still serve on it.  And one guess on who appoints the
    Supervisory Committee?  Yes, the BoD.  And to top it all off, one of
    the BoD can serve on the Supervisory Committee.  This is important
    because it takes a UNAMINOUS vote of the Supervisory Committee to
    remove a director.  However, the Supervisory Committee can call a
    special meeting by a majority vote.
    

.0>    He said that we would be receiving notice of the Special Meeting very
.0>    shortly. When reminded that the meeting was to be held within 30 days
.0>    of the submission of the petition, he said simply: "that isn't true."

    I can tell you for a fact that he stated otherwise when I spoke to him
    to arrange delivery of the petitions.  I also personally informed him
    of the NCUA interpretation, as well as the BoD.  At this point I must
    also call Mr. Cockburn a liar.  He appears to have taken on the look
    and feel of the BoD.  He certainly is stating the party line.

.0>    Chuck wanted to make it clear that the Credit Union has never made
.0>    "illegal loans." The statement that the loans to Mangone were "illegal"
.0>    is an "out and out lie." Phew. It's a good thing that these highly
.0>    speculative loans, made without adequate authentication, to non-D.C.U.
.0>    members (real estate trusts), in direct contradiction of the D.C.U.
.0>    by-laws and a professed conservative lending policy, were legal.
    
    None of these loans were to Mangone, personally.  Nobody has ever said
    they were illegal.  The primary question(s) have been did the BoD
    exercise "due care" in reviewing and approving these loans (oops,
    investments) and was Mr. Mangone's involvement in the entire process in
    violation of the Bylaws?


.2>   However, the  NCUA general counsel does not agree.  PG talked to him (in
.2>   DC)  and  I spoke to an NCUA official in Albany and they both are of the
.2>   opinion  that  the  meeting  must  be *HELD*.  So, if the meeting is not
    
    I'd like to clarify this.  I spoke with a person in the regional office
    in Albany.  He then called the NCUA headquarters in Washington D.C. and
    the Office of General Counsel rendered the opinion.  The Albany Office
    then conveyed the message to me.
    
.5>1.  the bylaws are changed - somehow,

    Given what I have seen from the NCUA in this matter, I can't say this
    is out of the question.  Although it certainly would open them up to
    a dandy lawsuit.
    
.5>2.  there is another intepretation of the bylaws such that the
.5>    meeting does NOT have to take place within 30 days.  In any
.5>    contract, there can be more than one intepretation,

    So whose interpretation is followed?
    
.5>3.  the bylaws are NOT followed and special dispensation is approved by
.5>    NCUA or some other relevant bodies.

    Again, lawsuit time.
    

.9>Ah... A question I do not recall anyone asking...  Exactly what do you expect
.9>the NCUA to be able to do?  Impose a fine? Guess where the money would come
.9>from.  Slap on the wrist?  Specifically WHAT penalties are there if the
.9>special meeting is not held when it should be?  Exactly what control DOES
.9>the NCUA have over DCU?
    
    The NCUA has the authority to remove the board of directors.  They may
    also revoke or suspend the charter of the credit union.  What WILL they
    do?  Probably nothing, on their own.  From my conversations with both
    the Washington & Albany offices, there appears to be a "hands off"
    policy.  How far this will extend, I don't know.  But I do know that
    that they report to the Senate Banking Committee and Senator Kerry
    (D-MA) sits on it.  That is why I have been asking people to copy their
    Senators and Congressman to any and all complaints to the NCUA.
    
    Just an aside, the NCUA was made aware of some interesting activity
    involving Barnstable Credit Union back in 1987 by the Cape Cod Times. 
    Nothing much ever came of it, until 4 years later when the NCUA had to
    come in and shut the place down and sue people for $47 million in
    losses.  So please don't read too much into being audited and reviewed
    by the NCUA.  They appear to be better at picking up the pieces than
    making sure the credit union doesn't break in the first place.
    
.11>1.  the NCUA's intepretation is that the meeting must be held within
.11>    thirty days.  

    A third witness.
    
.11>2.  I asked about penalties. There isn't any. The NCUA will, however
.11>    investigate.

.11>3.  Is the BOD likely to be removed as a result of this investigation?
.11>    The answer was unlikely.

    They will only remove them if there is fraud involved or the credit
    union is likely to suffer damages.
    
.11>4.  What would happen if the meeting were held after the 30 days period?
.11>    The special meeting could be invalidated.

    So there is no penalty for the BoD or DCU when the Bylaws are violated,
    but the people who called the special meeting are screwed.  Sounds like
    the Washington bureacracy to me.  We're fighting more than city hall
    here folks!
    
    .11>5.  How could the 30 days requirements be enforced?  Request in writing
.11>    an intepretation from the General counsel in Washington, DC.

    So what?  With no penalty for ignoring the interpretation, what is the
    point of getting it in writing?
    
    Everybody must be aware that we are asking the NCUA to bite the hand
    that feds it.  They are funded by the credit unions, NOT by the
    taxpayer.  I don't think is right but that's the way it is.  Let's face
    it, everything in place, is there to ensure everything is KEPT in
    place.  We have to document how this bureacracy has worked to our
    detriment.
    
    
    	People, this may well be a 3 year battle, the normal time required
    to turn all of the BoD out of office through normal elections.  I
    guarantee you that I am in this for however long it takes.  I will not
    allow this BoD to wear me down or keep through legal manuevering what
    they cannot keep through honorable means.
    

One thing I want to mention here is that members may not have shown up to some 
of these meetings because THEY DON'T HEAR ABOUT THEM.  I have only begun to be
tuned into what is going on.  I didn't read this notes file much.  I didn't hear
anything of the meetings.  So, just because there was little attendance, don't
believe that people don't care.

Ed..

    Would it be a good idea to have a poster put up at each site giving
    the details of the special meeting (or many posters) and have
    information available outlining the our grievences with the current
    BOD.

    This could be posted outside the lunch area and other employee bulletin
    boards though out the sites most likely to produce members at the
    meeting.  A local contact should be available to answer questions for
    concerned members.  I would suggest posting this outside the DCU
    offices but permission for this may be a bit more difficult to obtain.

    Unfortunately, Im in COLORADO but if you think it will help, I would
    volunteer to post information and serve as a source for answers to
    questions.  At the CSC, a wide distribution via mail is possible using
    the @SOCIAL.DIS distribution list.

    Good Luck,

    Bob

    P.S.  I took MM advice and found a bank that offers the services I
    require at a competitive rate (free checking, etc|) and have already
    switched my Direct Deposit.  I continue to maintain my accounts tho
    have cancelled by wife's checking in favor of the bank.
    
    

    
    We've had our notice ready for a while.  All it needed was a date, time
    and place.  Over the weeks preceding the special meeting, look for much
    activity concerning DCU issues.