Industry To Fight New NCUA Power Grab
WASHINGTON – The credit union lobby, which has been clashing increasingly with NCUA, said yesterday it will oppose NCUA’s proposal to increase its powers by, among other things, extending the statute of limitations on directors and officers and claims to as long as 10 years.
“We do have concerns about it,” said Mary Dunn, senior regulatory counsel at CUNA, who noted that the FDIC was given powers to go back five years from the date of failure or conservatorship to pursue claims against directors, officers and responsible third parties – half the statute of limitations being sought by NCUA.
The NCUA bid comes as the expiration of the statute of limitations is being raised as a defense by directors of WesCorp FCU, who are being sued by NCUA over the failure of the one-time $34 billion corporate. Several directors who left the WesCorp board in 2006 are arguing in court that the applicable three-year statute of limitations for their service on the WesCorp board has expired.
NCUA Chairman Debbie Matz told the Senate Banking Committee in written testimony yesterday the longer statute of limitations will help NCUA limit losses to the National CU Share Insurance Fund by giving the agency greater latitude to pursue those responsible for credit union losses.
But CUNA’s Dunn said NCUA already has enough time to pursue wrongdoing under current laws, as long as six years.
NAFCU agrees with CUNA and says the FDIC’s five-year period should be enough for NCUA.
Both lobby groups also will oppose NCUA’s efforts to obtain power to examine third-party vendors, including CUSOs, powers the other federal regulators already have and that NCUA had briefly, but has since expired, to deal with potential problems surrounding Y2K. “We have long been opposed to the agency extending its examination authority to third-party vendors,” said NAFCU President Fred Becker.
Opposition to the expanded NCUA powers comes as the lobby groups continue to criticize NCUA’s 13% spending increase and generous employee raises for next year. That comes after increasing tension over NCUA’s secrecy over the budget process and on setting the assessments for the corporate bailout and the NCUSIF premium.
CUNA’s Dunn said NCUA already has adequate authority to go into the books of CUSOs when problems arise. She said CUNA has concerns about the potential costs of such expanded powers, to hire examiners, and the intrusion it would pose for CUSOs and other third-party service providers. “Our members are definitely opposed to this,” she said.