Pentagon Federal Credit Union of Alexandria, Va., is suing the federal government to obtain documents chronicling the closing of Capital Corporate Federal Credit Union.
The credit union lost $1.1 million when the National Credit Union Administration shuttered the liquidity center, and Pentagon Federal's chief executive, Ronald L. Snellings, says he suspects the agency acted improperly.
He wants to get documents that might prove his thesis and help the credit union get compensation from the agency, Mr. Snellings said.
"We're looking for a basis of recovery," he said in a recent interview. "We have a hint that this was mishandled, and it's buried in the material. I think somewhere down in there something is really amiss."
The country's second-largest credit union filed its complaint Oct. 25 in U.S. District Court for the Eastern District of Virginia.
A spokesman for the agency said only that the matter has been referred to the general counsel's office.
Pentagon Federal originally sought to obtain the documents under the Freedom of Information Act. In a May 31 letter to the agency, Stanley P. Spence, the credit union's associate general counsel, asked for "all minutes, board action memoranda, and supporting documents for NCUA Board meetings from September 1, 1994, to May 30, 1995, wherein Capital Corporate Federal Credit Union was an issue or was discussed."
The agency denied the request. After a July 28 appeal it released some redacted material, but not enough to satisfy Mr. Snellings.
"We want the juicy stuff," he said.
The Pentagon Federal board voted in August to sue the agency if it was stingy in releasing documents. Another vote was held Oct. 24.
A win for Pentagon Federal wins and its discovery of something amiss in the record could have big consequences for the agency, industry sources said. About 250 credit unions lost $23 million when Cap Corp collapsed, and some have talked about suing the regulator.
