ALEXANDRIA, Va. – NCUA said this morning it has barred the former CEOs of U.S. Central FCU and Members United Corporate FCU from working for or with any corporate credit union for their roles in the biggest credit union failure ever, of U.S. Central FCU.
Francis Lee, the former CEO of U.S. Central, the one-time $52 billion central bank for credit unions, and Joseph Herbst, the former chairman of the board of U.S. Central and CEO of $14 billion Members United, agreed to the bans. The failure of U.S. Central is projected to cost credit unions $5 billion to resolve.
U.S. Central and Members United were among five corporates that failed in 2009-2010 at an estimated cost of $16 billion to $20 billion to the credit union movement. The other failures were WesCorp FCU, Southwest Corporate FCU and Constitution Corporate FCU.
The corporate bans are identical to one announced yesterday for Robert Burrell, the former chief investment officer at WesCorp FCU, and by the former CEO of CapCorp FCU, Clayton Brooke, for the 1994 corporate failure.
Both orders, which bar the two corporate figures from becoming an employee of, holding any office in, or otherwise participating in any manner in the conduct of the affairs of any federally insured corporate credit union; consulting or advising any federally insured corporate credit union on any matters involving or relating to investment securities, investment policy, or investment strategy; or selling any investment securities to any federally insured corporate credit union; were part of the settlement of potential civil claims to be brought by NCUA.
