It's safe to say that Norman E. D'Amours and William Brooks, chief executive of Lafayette Federal Credit Union, aren't friends.

Mr. Brooks has been one of the National Credit Union Administration chairman's harshest critics since Lafayette lost $200,000 it had invested in Capital Corporate Federal Credit Union, which failed in January.

Mr. Brooks, 44, has bashed the agency in print, in testimony before a House Banking subcommittee, and in a faxed newsletter to former Cap Corp members called "News About Ned" - Ned being an acronym for the regulator's name.

"I'm sure Mr. D'Amours doesn't hold me in high esteem; I don't hold him in high esteem either," said the former NCUA examiner, who has always enjoyed a reputation for speaking his mind.

Mr. Brooks and other credit union officials are taking their case for a refund from the Cap Corp fiasco to Mr. D'Amours today at 2:30 p.m.

Mr. Brooks has a record of crossing the agency under Mr. D'Amours. The Kensington, Md., institution was one of just 40 credit unions examined for lending bias in 1993.

The examination, triggered by 1992 Home Mortgage Disclosure Act data that revealed Lafayette's rejection rate for black applicants was higher than for whites, found no evidence of discrimination.

The examination "was just a dumb idea," Mr. Brooks said.

But Mr. Brooks was far more peeved about the NCUA's handling of Cap Corp. Shortly after seizing the institution on Jan. 31, the agency sold off its entire investment portfolio at a loss. That action forced Mr. Brooks to write down $231,891 of the $309,188 he had invested as a capital deposit.

The loss galls Mr. Brooks because he believes it could have been avoided. Before the final sale, Mr. Brooks and other credit union officials with money at stake met with the agency and offered to buy the remaining securities and hold them.

The agency refused, arguing that the plan was impractical and defending the decision to sell as the best way to protect the insurance fund. The 251 deposit holders lost about $23 million.

Mr. Brooks hasn't taken his lumps quietly.

Testifying before the House Banking subcommittee on financial institutions and consumer credit in February, he accused the NCUA of getting tough too late.

Mr. Brooks told the panel that the NCUA cracked down on Cap Corp. after it was in conversatorship in order to cover up the agency's earlier failure to recognize the dangers posed by the corporate's mortgage derivative-heavy portfolio.

The NCUA then failed to guard credit unions' interests, he charged.

"The conservatorship should have been a protection" for credit unions, Mr. Brooks said in his testimony. "This conservatorship by NCUA gave (credit unions) as much protection as Tennyson's Light Brigade had going into the Valley of Death."

Mr. Brooks also has heckled Mr. D'Amours in a newsletter called "News About Ned," which provides updates on the longshot efforts to get money back from the NCUA.

The newsletter "is going back to the good old days of the '60s when, if there was someone you didn't like, you made fun of him," he said. "For the most part people have laughed, although one person told me he couldn't believe examiners haven't been over."

Not everyone is chuckling, though. Sources said some industry officials trying to get back their money have griped that Mr. Brooks' words have made efforts to get compensation from the NCUA more difficult.

NCUA Executive Director Karl Hoyle is also less than amused. He said Mr. Brooks and his cohorts should recognize they took a risk by putting money in higher-yielding, at-risk capital deposits.

"They should stand up to the plate and admit they gambled and lost," he said.

Mr. Brooks shrugged.

"There's a time when you have to stand up and let them know" what you think, he said. "You have to get their attention. I think we got their attention now."

"It's going to be an uphill battle and the cards are stacked in NCUA's favor," he said. "It just depends on how long NCUA can continue to deny any wrongdoing."

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.