I asked a friend recently if she could provide an answer based on the following clues:
1) It has billions of dollars in assets;
2) The overseers are not elected, rather;
3) they are appointed among themselves;
4) there are never any elections; and
5) all meetings are closed.
My friend guessed Belarus – a good guess, but Belarus has elections.
The answer is Orange County’s very own SchoolsFirst Federal Credit Union – the largest financial institution in the county and the fifth largest credit union in the nation. The majority of SchoolsFirst’s members serve public and private schools, colleges and universities in Orange County.
By definition a federal credit union is known as a cooperative – a democratic organization owned and controlled by its members with equal opportunity for participation in setting policies and making decisions.
As a member of SchoolsFirst it doesn’t matter how much one may have on deposit or the length of membership. The SchoolsFirst board and its CEO, Bill Cheney make it nearly impossible for any member to participate in anything remotely close to the democratic process.
The SchoolsFirst board of directors who oversee the $22 billion operation have never faced an election. Many federal credit unions solicit members to serve on their boards. The SchoolsFirst board has never placed more than one nominee on a ballot for an open seat so new board members are always appointed with three current board members having ties to the same public employer.
And attending meetings? SchoolsFirst members are not permitted to attend regular meetings.
Should a member raise questions about this process they can expect to hear from SchoolsFirst’s legal counsel as I did.
As non-profit organizations many credit unions freely post or disseminate their bylaws upon request. SchoolsFirst will not provide their bylaws unless the member signs a 450-word legal agreement outlining disclosure restrictions and warning the member they will be held responsible for any breach of the agreement.
Federal credit unions believe in the principal of one person one vote and their existence is based on representing the communities where they began. The SchoolsFirst board has made it obvious that one-person one-vote does not apply just like diversity is important as long as it doesn’t affect the dozen board members; none of whom are persons of color.
It’s easy to understand why such a culture at the board level exists. CEO Cheney believes having women on the board and members with different educational backgrounds means it is diversified.
“We have seven men and six women. And our board reflects our membership in many ways, including diversity of backgrounds in education”, Cheney told a reporter for credit union trade publication, CUToday.
A leader should express the values of inclusiveness and democratic representation. Offering excuses like Cheney has raises questions about the leadership of SchoolsFirst. In the first five years of Cheney’s tenure, there were three board openings and three new members, none persons of color were appointed without an election at a time when none of the current board members were persons of color.
After a series of articles about SchoolsFirst’s failure to have a person of color serve, Cheney and his board finally did relent recently and appointed two minorities, but without voting rights. SchoolsFirst members were not provided the opportunity to vote on these new board members.
The SchoolsFirst board considers this non-voting role for the new board members as a training period. Appointing minority board members or any new member without voting rights does not align with the democratic nature of a cooperative.
No board should manage in such a way – especially a board that oversees a non-profit organization whose mission is to provide an “unwavering commitment to serving the best interests of [its] members”.
The best interests of SchoolsFirst’s members should start by its board and CEO to begin operating like a democracy so all members can be involved.
Chip Filson, a nationally recognized leader in the credit union industry recently wrote, “Democracy is not a rule, set of bylaws, or even an idea. Rather it is a discipline requiring personal actions”.
Dr. Barry Resnick, a professor of counseling is in his 41st year as a faculty member in the Rancho Santiago CCD. He has resided with his family in the city of Orange for 33 years.
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