SANTA ANA, Calif.–Tensions between SchoolsFirst CU here and parties demanding changes to its board reflect the diversity of its one-million-plus members are not easing, with one person calling a recent letter from the credit union a “bold-faced lie.”
The credit union has been pressed by the NAACP to make changes to its board, as reported here and more recently the Rancho Santiago Community College District (RSCCD) sent a letter to SchoolsFirst FCU in July calling on it to take action within the next 90 days to replace at least six members of its board with people of color.
SchoolsFirst has now responded to that demand. In its response, Schools First said in a letter to the RSCCD Board of Trustees dated Aug. 9, 2021 that was published on VoiceofOC.org (for Orange County, Calif.), “Just as RSCCD has a longstanding commitment to diversity, equity and inclusion, so too is diversity, equity and inclusion at the core of the culture at SchoolsFirst FCU. For many years, our organization has built an incredibly diverse and inclusive leadership, management team and employee base. We also recognize that changes to our volunteer Board of Directors have taken more time to evolve, but we continue to be committed to change through a process that is appropriate for an organization of our size in a highly regulated industry.”
‘Well-Qualified’ Individuals
The SchoolsFirst letter, which is signed by CEO Bill Cheney and Board Chair Greg Marchant, states that its board is comprised of “13 well-qualified individuals who are nominated and voted on by our membership for their experience, capabilities, and support of the mission, culture and values of SchoolsFirst FCU.”
The letter further states that in addition to its board, SchoolsFirst has three advisory councils and a forum chaired by Cheney whose members “have diversity in experience, gender, age, culture and geography to help us represent and serve our membership.”
“The combination of the strict government regulation under which Schools First FCU operates, along with our stewardship of the assets of 1.2 million members, requires a certain skill set, training and experience to manage an asset class of more than $26 billion,” the letter states.
‘Serious Concerns With Regulators’
“While your letter requests that we replace six current board members within the next 90 days, such a move would raise serious concerns with regulators, and the loss of valuable experience and knowledge that has helped our credit union succeed would not benefit our members or the communities we serve,” the SchoolsFirst response continues. “Our board is committed to creating, maintaining, and growing a culture that strives to go beyond ethnic and cultural diversity. Each member of our Board believes that we can and will strengthen our inclusive culture.”
The letter concludes by saying SchoolsFirst welcomes recommendations for potential members of its board.
A Strong Response
The letter has been strongly criticized by Dr. Barry Resnick, a professor of counseling in the Rancho Santiago CCD, who has been leading the charge in calling for change at SchoolsFirst and who has published numerous statements on the blog.
Resnick, who posted the credit union’s response on VoiceofOC.org, said in response to the SchoolsFirst letter, “The seven diverse elected (Rancho Santiago Community College District) trustees and student trustee expect their community credit union to embody the values and principles that they practice as elected officials. The RSCCD trustees represent the demographics of the communities the college district serves and believe the SchoolsFirst board should represent the communities the state’s largest credit union serves.”
Resnick then made several strong statements about the SchoolsFirst statement.
“Cheney and Marchant’s response is filled with excuses and glib statements that are either outright false or make no sense related to the request by the eight RSCCD trustees,” he wrote. “They begin by claiming the current 13 voting SchoolsFirst board members as having been ‘…nominated and voted on by our Membership for their experience.’
‘A Bold-Faced Lie’
“This is a bold-faced lie and Cheney and Marchant know better. None of the 13 members ever faced an election. Each was nominated by their fellow SchoolsFirst board members. In fact, there has never been an election for a SchoolsFirst board seat in a generation,” Resnick stated.
Resnick further said the letter’s claim that “strict government regulation” is the reason why the current board members must be retained is “also untrue.”
Resnick cited NCUA Regulation 701.4, Duties of Federal Credit Union Boards of Directors, as stating, “At a minimum, a director should be able to examine the credit union’s balance sheet, income statement and be able to answer the following questions.” Those questions including understanding line items in a CU balance sheet.
“Out of the 1.2 million SchoolsFirst members, there certainly should be a half-dozen persons of color who can meet these requirements,” wrote Resnick. “SchoolsFirst could likely find professionals whose backgrounds would exceed those of the current members who mostly serve or have served in public education as teachers and administrators…The NCUA believes in the democratic process and provides federal credit unions with bylaw guidelines on how to conduct elections. If six board members are replaced in a duly held election and the new members meet the requirements outlined in Regulation 701.4, the concerns would only be Mr. Cheney’s to be used as a continued excuse.”
Resnick alleged SchoolsFirst continues to make “hollow promises” and that while the CU may be doing well financially, it is “failing to be an example of leadership for our community.”