WASHINGTON - Capital Corporate Federal Credit Union is history, but some of its former shareholders refuse to let its memory die.
A group of institutions is demanding that the National Credit Union Administration cover the loss they suffered when the agency dumped the seized corporate's investment portfolio in February.
They've carried their message to agency officials, the White House, and Congress.
Some NCUA employees are worried enough about the credit unions' protests that they, unsuccessfully, asked the agency for indemnification against any lawsuits by the institutions.
"Having to write off that money is the difference between having a reasonable year and one that isn't so good," said Bill Brooks, chief executive of $117 million-asset Lafayette Federal Credit Union, swhich lost about $200,000 in Cap Corp.
Mr. Brooks is a ringleader of credit unions seeking to get their money back. Cap Corp's failure cost 251 institutions about $23 million.
The Washington, D.C.-based credit union chief communicates with officials of all those institutions on efforts to reclaim their money in a periodic fax known as "News About NED" - NED being a play on the initials of NCUA Chairman Norman E. D'Amours.
As the name implies, the fax is tongue-in-cheek, mixing news about how former Cap Corp members have taken their case to Congress and White House Chief of Staff Leon Panetta with slams on Mr. D'Amours.
For example, the fax described Mr. D'Amours' reaction to a March 31 visit by Cap Corp members this way: Mr. D'Amours "cowered in his office and refused to personally accept our letter or speak with us . . . This behavior is radically inconsistent with Mr. Norman 'I Want to Maintain Open Dialogue' D'Amours."
Mr. Brooks said Cap Corp members will meet with Mr. D'Amours later this month. He believes the agency will honor the claims, but if it doesn't, he and other credit unions might sue.
That specter was enough to drive the NCUA officials who acted as Cap Corp's board during the conservatorship to seek indemnification from the agency if they were sued as individuals.
Those four officials are Karl Hoyle, the agency's executive director; Allen Carver, director of the office of corporate credit unions; Len Skiles, president of the NCUA's asset liquidation management center; and David Marquis, director of examination and insurance. It was this group that decided when and how to sell off Cap Corp's investments.
Sources indicated that NCUA directors Robert Swan and Shirlee Bowne were not told this temporary board was created to handle Cap Corp's resolution. When the idea of indemnification was pitched to them, they rejected it.
"This was something unprecedented," said Bob Loftus, the NCUA's director of public and congressional affairs. "Folks were concerned that if it were done, there would be a precedent and then there'd be more suits because the agency has deep pockets."
An NCUA official said the idea of indemnification as a matter of agency policy would surface again.
"If you're going to ask employees to put themselves on the line, you have to stand behind them," the official said.