The National Credit Union Administration last week agreed to release to Pentagon Federal Credit Union documents related to the 1995 failure of Capital Corporate Credit Union.
Pentagon Federal, which had sued to get such documents, said it would withdraw its suit if the material provided were adequate.
Pentagon Federal had invested in Lanham, Md.-based Cap Corp, and lost $1 million after the regulator seized it in January 1995. The federal credit union sued the NCUA to find out how the agency regulated, took over, and finally liquidated Cap Corp.
"The information in these transcripts and documents will confirm that the way in which the agency handled the conservatorship and liquidation of Capital Corporate Federal Credit Union was entirely appropriate," NCUA Board Chairman Norman D'Amours said in a statement issued Tuesday.
"We are tired of the misinformation being circulated," Mr. D'Amours said.
The NCUA's decision was prompted in part by a June 7 ruling by the U.S District Court for the Eastern District of Virginia denying the agency's motion to kill the case.
The NCUA had argued that Pentagon Federal's lawsuit should be dismissed because disclosure of the information might discourage credit unions from providing the agency with data.
But the court rejected that argument. It said the credit unions that submitted some of the documents have admitted that disclosing the information would not cause them competitive harm.
The lawsuit is still scheduled for Aug. 12. However, the hearing may be called off because of last week's agreement, said Pentagon Federal chief executive Ronald L. Snellings.
"While we expect to get everything we're asking for, we'll only be able to decide whether to cancel our suit once we've looked at the documents," Mr. Snellings said.
The NCUA is expected to deliver the documents to Pentagon Federal officials as early as this week, sources said.
