SAN ANTONIO–New details are being reported in an ongoing court case involving allegations of misconduct by executives at Generations Federal Credit Union here.
The case involves the resignation of the credit union’s former president and CEO, a lawsuit by a former vice president who says she was excluded from consideration to replace him because she was the “whistleblower,” and another lawsuit by another former employee who says she was improperly fired, according to the San Antonio Express News.
The CU Daily first reported on the litigation here.
Board Member’s Summation
In a recent court filing, Generations Board Member Anthony Rogers summed up the situation at the credit union as, “The majority of the complaints involved allegations of abuse of power, ethical and professional code violations by (the credit union’s) (former) president and CEO, according to the Express News.
The report noted that Raymie allegedly had affairs with two female subordinates. Amid an investigation, Raymie resigned during the summer of 2024 after five years leading the organization and 10 years overall the institution. Raymie has previously called suggestions that he had inappropriate relationships “unfounded.”
Defamation Alleged
“One of the subordinates, no longer employed by Generations, sued the credit union and its board for defamation and retaliation over her termination, seeking more than $1 million in damages,” the Express News reported. “Generations has denied the allegations, but last month failed to convince a judge to throw out her claims for defamation and negligence.”
It further reported that in a second lawsuit, a vice president says she was passed over for promotion in retaliation for being “one of the principal whistleblowers” who reported his “multiple inappropriate, inter office relationships” to an investigator. The former VP is also suing for more than $1 million.
The Express News said the turmoil at the “normally staid financial institution” formerly known as San Antonio City Employees FCU led to anonymous complaints about Raymie to NCUA.
Additional Allegations
“Court documents also reveal that Generations had to report the alleged misconduct to its insurer or risk losing insurance coverage — relating to employee dishonesty — for the entire organization,” the Express News said.
A spokesperson for the $747-million Generations declined to comment, citing the pending litigation.
‘Four-Week Fling’
After employees reported misconduct in late 2023, Generations said it launched an investigation, noting in a June 9 court filing, that “there was a concern with Raymie’s lack of transparency and potential misconduct as an executive employee.”
It added that Jessica Hernandez, a now-former Generations senior vice president — whose lawyer told the Express News she had a “four-week fling” with Raymie — also had a responsibility to voluntarily disclose the relationship, pursuant to its employee handbook, the report stated.
“Generations said that ‘as a result of the aftermath of his misconduct and confirmed affair’ with Hernandez, Raymie ‘ultimately resigned in July 2024,” the Express News said. “During the investigation, it learned that Raymie had ‘unilaterally awarded’ Hernandez a retention bonus in July 2023. Only after his resignation did it discover the bonus was $30,000.”
An attorney for Hernandez said the bonus was paid to keep her from leaving the credit union for a position at credit union vendor SWBC, which is based in San Antonio.
‘Falsely Accused’
According to the Express news, in an amended complaint filed June 30, Hernandez said two Generations board members — Rogers and Rosalie Manzano— had “falsely accused” her of “fraud, theft and dishonesty” over pocketing the bonus.
Hernandez alleged the “defamatory statements” were made to the Credit Union Administration and TruStage, which provides bond coverage to the credit union, according to the documents cited by the Express News.
The report said NCUA recommended the credit union report the investigation into Raymie to its insurer, and that its new CEO, Rick Divina, added in a June 9 unsworn declaration that Generations was contractually bound to report “any potential employee misconduct” to TruStage.
No Longer Bondable
According to the Express News, in late January TruStage notified Generations FCU that it had “revoked the bondability of both Ken Raymie and Jessica Hernandez,” Divina said in his declaration.
While Raymie had exited, “Hernandez remained an employee, but TruStage’s decision had significant ramifications for her — as she noted in her amended lawsuit filed June 30,” the Express News said. “Without the insurance coverage issued by TruStage … Plaintiff cannot be employed in a federal credit union or any financial institution,” Hernandez said in her complaint.”
Divina said he emailed a TruStage representative regarding the insurer’s decision, saying Generations “considered Jessica Hernandez a victim in the affair with her supervisor and he had a position of power/authority over her.”
‘Coerced Others’
The report said the revocation of coverage was because Hernanez lied to the Generations board and “coerced others to change their stories during the probe, Divina said in his declaration,” the Express news provided.
Hernandez has responded by saying those accusations are “false.” The Express News said she has refused to sign a release that would have been part of a separation agreement that would have provided 26 weeks of pay and health benefits.
A judge has denied Generations’ motion to dismiss the defamation and negligence claims.
Separate Lawsuit Also Filed
Meanwhile, the Express News reported, there’s been little action in the other lawsuit pending against Generations.
Leticia Gonzalez, VP-member engagement, filed a suit on May 8 that alleges she was passed over for consideration as Raymie’s successor because she was a whistleblower who assisted and participated in the “investigation into multiple inappropriate, intraoffice personal relationships of Raymie.”
“Gonzales identified the two employees Raymie allegedly had relationships with as Jane Doe 1 and Jane Doe 2,” the Express News reported. “Richard, Hernandez’s lawyer, has confirmed that his client was Jane Doe 1. The identity of Jane Doe 2 has not been revealed but, according to Gonzales, was an employee whom ‘Raymie mentored for a little over two years’.”
Gonzales has sued for breach of contract, retaliation and discrimination “based on assistance and participation in an investigation or sexual harassment.”
No court hearings have been scheduled in the case, the report added.
