WASHINGTON – CUNA executives thought better yesterday of going to war with NCUA over last week’s takeovers of U.S. Central FCU and WesCorp FCU, and instead will work with the federal agency to try to mitigate the $5.9-billion cost of the corporate bailout.
"You never want to sue the regulator," CUNA General Counsel Eric Richard said of last week’s threat by CUNA President Dan Mica to sue NCUA, work for congressional hearings or appeal to the Obama administration if NCUA does not produce documents used to justify the two conservatorships.
Richard said CUNA plans to work with NCUA on several proposals before Congress, including the one introduced last week to create a separate insurance fund for corporate credit unions which would allow credit unions to spread out the cost of the corporate bailout to as long as seven years, or longer.
Under the Federal CU Act any party seeking to challenge the U.S. Central and WesCorp conservatorships had until 10 days after the two were taken over–yesterday–to file suit. CUNA said it had no plans to file a legal challenge.
CUNA’s backtracking on its threat comes after Mica was contacted by members of Congress, including credit union champion Paul Kanjorski, the Pennsylvania Democrat, who urged the CUNA boss not to sue the federal government, according to several sources. To do so, while the government agency is trying to limit taxpayer liability during the ongoing financial crisis could jeopardize other credit union projects before Congress, the lawmakers are reported to have advised Mica, sources told Credit Union Journal yesterday.
Kanjorski did not respond to requests for a comment.
Mica, in a prepared statement, said, "CUNA is committed to keeping as many options open as possible in obtaining answers for credit unions from NCUA about how it reached the conclusions it did for conserving U.S. Central and WesCorp – including through Congress, the regulatory process and the courts."
"Along those lines, CUNA’s legal research has determined that we have other legal remedies available to us that are likely to be fruitful if we decide to go to court. However, CUNA has decided not to file a lawsuit today challenging the appointment of conservators, as we do not see sufficient opportunity to file within the 10-day period on the conservatorship issue."
