Six men blaming anti-Polish bias for their ouster from a credit union board have won what seems like a small victory in their fight for reinstatement.
After two weeks of testimony, a Federal District Court judge declined to dismiss the lawsuit brought by the six, who were the entire board of Polish and Slavic Federal Credit Union in Brooklyn, N.Y.
Instead, Judge Jack B. Weinstein ordered on May 14 that a full record of the proceedings be brought to the attention of the National Credit Union Administration "for whatever action it deems appropriate."
The NCUA had removed the board April 17 and put the $600 million-asset credit union under conservatorship.
Ousted director Marcin Sar praised the judge's decision. "We are not opening champagne bottles, but we do believe we are on the right course," said Mr. Sar, who had also once been general manager of the credit union. "I am hopeful the agency will make the fair and correct decision."
A spokeswoman for the NCUA board said she was not free to say whether it had acted on the matter last week at its regularly scheduled meeting. Though it was not listed on the agenda, a source familiar with the situation said he was told it had been discussed.
The spokeswoman said the agency had been "very pleased" with the judge's order.
In removing the board, the NCUA had cited the credit union for not reporting large cash transactions, a violation of the Bank Secrecy Act.
But the ousted directors argued that the NCUA's chief investigator in the case, Richard Schulman, is biased against people of Polish descent and therefore failed to provide the agency's board with information that would have been favorable to the directors.
Robert Wisniewski, a former attorney for the credit union, testified that Mr. Schulman had said in December "that the assets of the credit union grew incredibly fast, and his explanation was that it had to be drug money in the community."
When asked for evidence Mr. Schulman responded, "Where else would Polish people get so much money?" Mr. Wisniewski said.
Paul Sosnowski, a NCUA trial attorney, testified that Mr. Schulman had made fun of directors' accents and some of their last names.
Mr. Schulman conceded in court that he "may have" made fun of an accent, and that he had made a comment about the sound of a Polish name.
The NCUA spokeswoman, however, said the agency "'flatly denies" that bias was behind the takeover of the credit union. The decision was based on the facts of the case, she said.