7 CUs Oppose NCUA Intervention In WesCorp Suit
LOS ANGELES-Seven natural-person credit unions last week filed a motion to oppose NCUA's intervention in a lawsuit against WesCorp.
The regulator stepped into the lawsuit late last year, arguing that it should be substituted as plaintiff in the case as it is the only party able to "assert derivative claims" as it is the conservator. But in a motion filed by attorney David Parisi on Jun. 21, the seven CUs, all WesCorp members, assert that courts have widely differed on what rights members maintain following a conservatorship, and point to the case law NCUA cited in its motion to take over as plaintiff, Pareto v. FDIC, as irrelevant, because their lawsuit fits the "absurd or impracticable" exemption outlined in Pareto.
The motion cites NCUA's close involvement with WesCorp as the regulator, noting it had a number of examiners on-site on a daily basis for months prior to its failure, and further takes issue with its lack of a decision to pursue legal claims against the corporate and its former executives and board members a full 15 months after it collapsed.
"The NCUA has intervened in this action and is now a party. However, it is not the real party in interest with respect to the direct claims alleged by Plaintiffs for the false representations Defendants made, upon which Plaintiffs justifiably relied to their detriment," the motion states. "Moreover, the NCUA is hopelessly conflicted regarding the failure of WesCorp and cannot be expected to diligently prosecute all claims that may belong to WesCorp."
Air Force FCU Counting On New FOM
SAN ANTONIO-Officials with Air Force FCU last week were counting on a new FOM approved by NCUA to help it overcome a rare citation by the federal regulator for violation of its own FOM and minimize an unprecedented order to divest loans and deposits of ineligible members. The new FOM will allow the $330-million AFFCU to serve anyone serving in the U.S. military in Texas, Oklahoma, Mississippi, Louisiana and Arkansas, as well as civilian or federal government employees at military facilities in those states.
The one-time Lackland Air Force Base FCU was cited in a rare Letter of Understanding and Agreement earlier this year for what NCUA said was "an overly expansive view" of its field. Ineligible members made up a significant percentage of the credit union's shares and loans, NCUA said. AAFCU is still working on a divestiture plan with NCUA, the spokesman said.
Geithner: CUs Could Expand Credit
WASHINGTON-U.S. Treasury Secretary Timothy Geithner pointed to credit unions and other community development financial institutions as among the ways Treasury is seeking improve the availability of credit to small businesses in the U.S. To date some 111 CDCUs have applied for Treasury's Community Development Capital Initiative, which makes secondary capital investments of up to 3.5% of assets in eligible low-income CUs. NCUA is reviewing those applications; some $100 million in total funding is available. Geithner said Treasury "expects to begin funding by next month." Earlier, the National Federation of Community Development CUs announced a plan to provide an additional $1 million in secondary capital available as matching funds for member CDCUs that might not be immediately eligible for CDCI investments.
Sperling Is Interim CEO At Greylock
PITTSFIELD, Mass.-Marilyn Sperling has been named interim CEO at the $1.3-billion Greylock FCU, after previously serving as EVP. Sperling fills the void created by the resignation of Angelo Stracuzzi, who was dismissed after it was disclosed he was involved in a misdemeanor assault in Maine. The change has led GFCU to oversee removing the highly visible Stracuzzi from local advertisements and replacing them with a new print and radio campaign called "I Am Greylock," which focuses on individual employee achievements. Sperling began her career as a teller at the local Berkshire Bank & Trust 35 years ago.
Virginia CUs Partner With Baltic CUs
LYNCHBURG, Va.-The Virginia CU League last week signed an agreement to encourage information sharing between the league and CUs serving Estonia, Latvia and Lithuania The signing took place during a Baltic Summit that brought together CU leaders from all three nations and also included the formation of Baltic Services Co.