Ken Robinson, president of the National Association of Federal Credit Unions, criticized federal regulators for dragging their feet in winding down the industry's largest failure.
By not speedily resolving an inquiry into the collapse of Capital Corporate Federal Credit Union, the National Credit Union Administration is exacerbating tensions between it and the former depositors, he said.
"They need to put some kind of determination into bringing this thing to closure," Mr. Robinson said during a Jan. 16 breakfast with reporters. "Now it just looks like they were dawdling. It creates ... anxiety - what are they going to do next?"
Meanwhile, the directors of Cap Corp still under investigation are "twisting in the wind," he said.
Cap Corp's membership base included members of the federal credit union trade group, and association officials early on were critical of how the NCUA handled the crisis in December 1994 and early 1995. The Lanham, Md., institution was merged with another corporate in April.
The regulator in July hired the Washington law firm of Storch & Brenner to investigate third-party claims related to the failure. In October, the officers and directors of Cap Corp received wide-ranging subpoenas; shortly thereafter, they hired lawyers to represent them.
The agency budgeted $1 million from the liquidation estate to investigate the failure. The agency is particularly interested in probing the corporate's investment practices.
Mr. Robinson complained that since the investigation began the agency has neither divulged what they are looking for or how long it will take.
In a Dec. 15 letter to former Cap Corp depositors, the agency warned that, by paying for lawyers with the defunct corporate's fidelity coverage, the directors and officers were diluting possible future recoveries.
Leonard Skiles, president of the NCUA's Asset Liquidation Management Center and the liquidating agent of the corporate, replied in a statement.
"We can understand and even sympathize with Mr. Robinson's concerns," he said. "However, we are proceeding expeditiously to complete the necessary investigation of this entire matter ... If Mr. Robinson has reasonable and responsible suggestions to move this proceeding expeditiously, the NCUA would be pleased to hear them."
