SENATE DELAYS NOMINATION
HEARING OF NCUA CANDIDATE
WASHINGTON-The Senate Banking Committee has indefinitely delayed the scheduled confirmation hearing of NCUA nominee Carla Leon-Decker because next Thursday's hearing is booked with several other nominations, including that of former Federal Reserve Bank of Kansas City President Thomas Hoenig to be to be vice chairman of the FDIC.
A hearing on Decker's nomination to the three-person NCUA Board has not been scheduled yet.
Decker, president of $47-million D.C. Government Employees FCU, would succeed Gigi Hyland, whose six-year term on the panel expired in August. Hyland has been serving as a holdover until a successor is seated on the Board.
Meantime, the Senate panel is investigating claims brought to its attention that Decker was the target of several complaints with the Equal Employment Opportunity Commission at her previous credit union job, according to Capitol Hill sources.
The committee is also reviewing the financial condition of Decker's credit union, which has reported losses for the past four years and was the recipient of Troubled Asset Relief Program bailout funds last year to determine how that may impact her ability as the ultimate regulator of the nation's credit unions.
NCUA WON'T PAY FOR WESCORP
FIGURES' LEGAL DEFENSE
LOS ANGELES-NCUA recently told a federal court here it should not be required to indemnify or pay hundreds of thousands of dollars in legal fees for the defense of top executives of WesCorp Federal Credit Union it is suing unless or until the executives prove they were not responsible for the failure of the one-time $34-billion corporate credit union.
NCUA, which has assumed all rights and responsibilities of the failed corporate giant as its liquidating agent, has denied coverage for former WesCorp CEO Bob Siravo, Todd Lane, its chief financial officer; Robert Burrell, chief investment officer; Timothy Sidley, chief risk officer and Thomas Swedberg, head of human resources, under a CUMIS bond indemnifying top directors and officers because NCUA claims that these same executives were responsible for the massive corporate failure.
In counterclaims brought against the federal regulator, the executives say a CUMIS D&O policy held by WesCorp (now NCUA) should pay their legal defense costs and indemnify them for any judgment against them in the suit.
Several of the former officers, including Siravo, Lane and Burrell, say they have already racked up more than $100,000 in legal costs to defend themselves against the NCUA charges.
NCUA noted the irony if required to indemnify the WesCorp figures for potential damages in the case.
"Allowing indemnification for the NCUA's lawsuit would lead to the "absurd result" that the NCUA could succeed in its suit against the (WesCorp executives), and then recover from itself," said the credit union regulator in its pleading.
The NCUA motion, which was filed with the U.S. District Court for the Central District of California, came as the agency was announcing two separate settlements with Citigroup and Deutsche Bank Securities totaling $165 million in the failure of WesCorp and four other corporates, U.S. Central Federal Credit Union, Members United Corporate Federal Credit Union, Southwest Corporate Federal Credit Union and Constitution Corporate Federal Credit Union.
The failure of the five corporates has cost the nation's credit unions an estimated $10 billion to resolve so far, including $3.3 billion in three annual assessments and some $6.5 billion in lost capital invested in the corporates.
In its motion to dismiss the counterclaims NCUA says the court lacks jurisdiction over the legal defense claims because California law requires indemnification only by solvent institutions.
"As a matter of law, corporate officers sued by the receiver or liquidator of a failed financial institution may not obtain indemnification from the estate of the failed institution, even if the officers ultimately defeat the claims against them," asserts NCUA.
IOWA CORPORATE PLANS
YEAR-END PARTIAL DISTRIBUTION
DES MOINES, IOWA-IOWA CORPORATE CENTRAL CU PLANS TO MAKE A PARTIAL DISTRIBUTION TO ITS 140 MEMBERS BEFORE YEAR-END AS PART OF A VOLUNTARY LIQUIDATION PLAN APPROVED BY THE BOARD OF THE $100-MILLION CORPORATE CREDIT UNION.
A final payout will be made once the dissolution is completed, expected in the first quarter of 2012, and all creditors have been paid according to Sara Flynn, president of Iowa Corporate.
Iowa will be the second corporate to liquidate this year, following the June dissolution of North Dakota's Midwest Corporate Credit Union. More than 100 of the Iowa corporate's members have contracted for correspondent services with the National Cooperative Bank to replace their corporate's services.
The membership vote for Iowa Corporate is scheduled for Nov. 17. There is an absentee voting period of 20 days. The liquidation, if approved, will occur on Dec. 8 and operations will cease at that time.
