Franklin Probes Appropriate Credit Union Vacuum Also Belongs on Agenda - Jan 20, 1989 - Omaha World-Herald
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Jan 20, 1989 Franklin Probes Appropriate Credit Union Vacuum Also Belongs on Agenda; [Bulldog Edition] Omaha World - Herald. Omaha, Neb. pg. 16
Full Text (630 words)
(Copyright 1989 Omaha World-Herald Company)
The involvement of at least 11 local, state and federal agencies in the Franklin Community Federal Credit Union-Lawrence E. King Jr. investigation is appropriate, considering the seriousness of what is known and what is alleged.
The credit union was closed by a federal agency Nov. 4. The agency said Franklin had sold about $39.5 million in certificates of deposit but did not record $38.5 million of the receipts on the credit union's normal books. King faces a civil lawsuit seeking $34 million from him. Investigators are looking for what happened to the money and whether children were sexually abused.
We hope that, in addition to the investigation of those matters, attention will be focused promptly and strongly on another vitally important aspect of the Franklin collapse - the vacuum it left in the credit union's service areas.
For its 5,900 shareholders, Franklin not only provided a way to borrow money and earn interest on savings but also, through its affiliated Consumer Services Organization, made credit counseling available.
Founded in 1968 by a neighborhood group that was concerned about the lack of financial institutions in North Omaha, Franklin had the deserved reputation of helping low- and moderate-income people learn how to manage their finances.
The credit union attracted significant support among leaders of the black community. Now-retired Municipal Judge Elizabeth Pittman helped raise funds to expand and renovate Franklin's headquarters building. Bernice Dodd, executive director of the Omaha Opportunities Industrialization Center, and Leon Evans, then president of the Community Bank, endorsed this appeal for funds.
Omaha business and political leaders expressed support. In the fund-raising campaign for the renovation and expansion, World-Herald Publisher Harold W. Andersen was chairman. Co-chairmen were Judge Pittman and Thomas J. Skutt, chairman of Mutual of Omaha. Then-Mayor Michael Boyle, who spoke at ribbon-cutting ceremonies for the renovated building in 1985, noted that the city had deposited federal community development block grant funds in the credit union.
"We have put our money where our mouth is," Boyle said. "We made the deposit for the very simple reason that we get excellent service."
A sense of loss was reflected in the words of Franklin depositors who commented after the credit union was closed. Lucinda Sampson said, "It helped our neighborhood. . . . When I was sick and couldn't get out, they paid my bills for me."
Ira Fuller taught his seven children to save money by starting accounts for them at Franklin.
Alicia Heisser said the Franklin staff gave "strong support to the poor, the disabled, single parents."
The community needed the services that Franklin provided.
No Nebraska case in the memory of our editors has been investigated or scheduled to be investigated by as many agencies as are looking at the Franklin collapse and related issues. So far as the possibility of criminal wrongdoing or official misconduct is concerned, the investigations appear to be in the hands of the proper agencies, including the FBI, the Internal Revenue Service, the Nebraska State Patrol, the Nebraska attorney general, the Douglas County attorney, the Omaha Police Department, a special committee of the Nebraska Legislature and a federal grand jury.
Certainly those investigations ought to be vigorously pursued.
So should the investigation of activities that, while they might have been improper, weren't necessarily a violation of the law, such as inadequate supervision or regulation. Surely those issues, too, will get attention as a result of the investigation by the National Credit Union Administration and proposed investigations by the House and Senate banking committees.As appropriate as all the investigations are, there remains the question of the vacuum that was left in North Omaha and South Omaha when Franklin collapsed. Perhaps an appropriate agency - the Legislature's Banking, Commerce and Insurance Committee is one possibility - will step forward to help find a solution.