WASHINGTON – Growing numbers of credit union executives are calling for an NCUA investigation into the causes of the corporate credit union meltdown.
"Where were they [NCUA] through all of this? Has anyone been disciplined? Has anyone been fired?" one credit union executive wondered during CUNA’s annual Governmental Affairs Conference last week.
One credit union executive commenting on NCUA’s proposed corporate reforms said the process would not be complete without a formal review of the causes for the failure of U.S. Central FCU and WesCorp FCU and the growing problems at other corporates.
"The failure of CCU management and NCUA to prevent losses to members of CCUs and the share insurance fund and perhaps ultimately to members makes it apparent that there should be a thorough and complete public examination of the causes leading to the failure of the CCU system," said Henry Wirz, president of SAFE CU. "We recommend that NCUA consider the Truth Commission in South Africa as a model. The object of the examination is not to place blame but rather to bring transparency to the causes so that before we make new rules we determine what went wrong."
"Rule making without a public examination of the causes of the failure is a failure of process," wrote Wirz, who urged NCUA to hold public hearings with testimony from corporate directors, management, CPAs, NCUA and third-party advisors.
"The $6 billion price tag for this failure will be absorbed by all (natural person credit unions) and their members," he wrote. "They have a right to know what happened."
So far, no one at NCUA has been disciplined for the corporate meltdown and NCUA has yet to bring any kind of enforcement action against any corporate executive or employee.
An NCUA spokesman said the agency has no current plans for a formal investigation into the causes of the corporate crisis, but that some of the questions may be answered during the ongoing review of the corporate reform proposal. Separately, the Inspector General for NCUA plans to conduct a material loss review on U.S. Central and WesCorp.
