NCUA Sued Over Conservatorship Loan Deal Gone Awry
A lawyer for Power Financial did not return a phone call seeking comment.MIAMI – Power Financial CU filed suit against NCUA in federal court last week after NCUA cancelled the sale of more than $15 million of mortgages from troubled Keys FCU to the suburban Miami credit union.
Power Financial said its July 2010 deal with NCUA was critical because the borrowers were within its field of membership, a difficult condition to meet for credit unions buying whole loans. Under terms of the deal, approved by the Florida Office of Financial Regulation, the borrowers were set to become members of Power Financial, which has been trying to expand into Florida’s Keys, a group if connected islands that stretch 160 miles south of Miami.
“It is extremely difficult for Power Financial to purchase replacement Mortgage Loans due to the fact that its ability to purchase the Mortgage Loans is limited by state regulation to specific preapproved geographic areas where persons may become members of Power Financial,” the $475 million credit union said in its suit.
The deal was terminated in August after NCUA, which is running Keys, told Power Financial the sale was no longer in the best interest of Keys.
Power Financial said it sent several letters to Keys demanding the Key West credit union abide by the agreement but has not received a response.
NCUA has been trying to resolve Keys FCU since it took the one-time $210 million credit union under conservatorship in September 2009. One deal to acquire the credit union by Dade County FCU fell through.
A lawyer for Power Financial did not return a phone call seeking comment.