GLENDALE, Calif.–A group of credit unions that filed a lawsuit against Western Corporate FCU are suggesting NCUA’s request that it instead be named lead plaintiff proves their case has merit, but several of the CUs involved claim NCUA has not shown it can adequately represent the interests of CUs when it comes to WesCorp.
“The seven participating credit unions are indeed flattered the NCUA has recognized our vision in taking a leadership role in prosecuting those responsible for the devastating losses incurred,” Glendale Area Schools FCU CEO Stuart Perltish told Credit Union Journal. “Because the NCUA failed to take appropriate legal action on behalf of the credit union community we initiated this litigation.”
As conservator of the failed corporate, NCUA asked a Superior Court in Los Angeles on Dec. 30 to allow it to intervene as plaintiff in the suit. The regulator argued that it is the proper plaintiff and should be permitted to replace the current plaintiffs and determine whether and how to proceed with any action against certain members of WesCorp’s former board and employees.
“We did what needed to be done and our action definitely has credibility; NCUA is saying that with their actions,” said Ray Dowling, President/CEO at Stamford FCU.
But Perlitsh is fairly pessimistic that NCUA’s involvement will have a positive outcome for WesCorp’s member CUs and levied a biting attack on the regulator.
“Where has the NCUA been since the WesCorp conservatorship? The NCUA has engaged full-time examiners at WesCorp for over the past 10 years. What responsibility in this mess is the NCUA willing to accept? With a seeing-eye dog the NCUA would not have found the courthouse if we did not bring them to it,” he told Credit Union Journal. “The NCUA was the appropriate party to represent us at WesCorp and we can all see how well that played out. Now they claim to be the appropriate party to prosecute this lawsuit. Based on their past performance I am not too optimistic.”
