WASHINGTON – CUNA President Dan Mica responded to criticism yesterday of CUNA’s role on the board of U.S. Central FCU, the focus of NCUA’s $5 billion corporate credit union rescue.
Mica said representatives from CUNA and the Association of CU Leagues were added to the U.S. Central board in order to bring a "different perspective from that of the corporate credit union CEOs," who hold the seven other seats on the board, and he believes the arrangement "has been value to the credit union system."
"As to the current crisis, experience has shown that few people, if anyone, anywhere in the U.S. financial system were able to predict the meltdown in the mortgage-backed securities market – the source of this predicament -- in advance. To expect any individual U.S. Central director to have done so is not realistic," said the CUNA chief executive.
CUNA’s representative on the nine-member panel is its chief operating officer John Franklin. In addition, Bill Cheney, president of the CUNA-affiliated California CU League, is the leagues’ representative on the panel.
Mica was responding to growing criticism of the U.S. Central board and specifically CUNA’s representative, in light of a $1.1 billion 2008 loss for the central bank for credit unions, necessitating a $1 billion capital infusion from NCUA. Earlier this week, Curt Prins, a long-time director at Congressional FCU and one-time CUNA lobbyist, tore into CUNA, saying its executives should have known about the deteriorating finances at U.S. Central.
Mica asserted that the information obtained by CUNA’s representative was confidential under his fiduciary responsibility.
He said CUNA Board’s Executive Committee recently reviewed the arrangement on the U.S. Central board "in light of current events" and decided to continue its representation on the panel.
