OmniAmerican CU Joins Suit AgainstNCUA

Register now

FORT WORTH, Texas - (07/29/05) -- OmniAmerican CU said Thursday it hasjoined Community CU in a federal suit challenging NCUA powers overthe conversions to mutual savings banks by the two Texas creditunion giants. In joining the Community CU suit as intervenors,OmniAmerican CU President Larry Duckworth said they believed the76% of the 22,000 voting members who approved the conversion of the$1.4 billion credit union to bank served as a powerful referendumon the charter switch. "Despite OmniAmerican having achieved thismilestone, NCUA has ignored its own regulations in refusing toapprove the vote," said Duckworth. "NCUA quibbled over the way asingle piece of paper was folded and even questioned mattersalready approved by the Texas Credit Union Department." TheOmniAmerican action comes as the credit union has asked NCUA tocertify its conversion vote, even though NCUA has indicated it willnot do so because of a dispute over the way the requireddisclosures were presented to members. Community CU--the biggestcredit union to ever seek conversion to bank--filed suit in federalcourt in Dallas on July 15 asking the court to overturn NCUArejection of its conversion vote and to order the federal regulatorto return its $10 million NCUSIF deposit.

For reprint and licensing requests for this article, click here.
MORE FROM AMERICAN BANKER