GLENDALE, Calif.-NCUA's request to be named the plaintiff in a lawsuit against Western Corporate FCU's former board and a number of current and former employees is all the more reason to believe the case filed by seven natural person CUs is a strong one, one CU plaintiff suggested.
"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 said. "Because the NCUA failed to take appropriate legal action on behalf of the credit union community we initiated this litigation."
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 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, CEO at Stamford FCU.
But Perlitsh was fairly pessimistic that NCUA's involvement would end in a good result 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 ten 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."
