WASHINGTON - The credit union industry's regulator postponed a decision Friday on the fate of a large, specialty credit union until early this week.

The National Credit Union Administration, led by Norman E. D'Amours, met Friday to decide whether to liquidate Capital Corporate Federal Credit Union or allow it to merge with a California corporate credit union.

Capcorp, based in Lanham, Md., is facing a liquidity crunch caused by unrealized losses totalling more than twice its capital. The paper losses were generated by its heavy investments in collateralized mortgage obligations, one kind of derivative.

The CMOs dropped in value and Capcorp could not meet depositor demands for money in December.

Capcorp, with $1.9 billion in assets, does not accept deposits from the public. If Capcorp is liquidated, its 474 member credit unions stand to lose any deposits over $100,000. The 251 who own $37 million in stock in the corporate credit union could lose all of it.

Capcorp had proposed a merger with Western Corporate Federal Credit Union.

Rep. Henry B. Gonzalez, D-Tex., scolded regulators for not stemming the problems.

Capcorp's situation, "serves as another reminder of the risks derivatives pose to the deposit insurance funds," said the House Banking Committee's senior Democrat. "I urge all regulators to be more vigilant. If the fundamental problems are not addressed, we are just whistling past the graveyard."

But the problems with Capcorp are not the only troubles in the credit union industry.

As credit unions nationwide have aggressively expanded customer bases, the industry's central bank has come under fire for its low capital levels and risky investments. Puerto Rico's corporate credit union was put in conservatorship and regulators have criticized the close ties between the industry's lobbying group and its liquidity centers.

U.S. Central Credit Union, which had 1.01% in capital at the end of June, is the industry's central bank. It drew Congressional attention last year for investing $255 million in Banesto, a Spanish bank that later failed.

Last September, the NCUA seized the liquidity center for Puerto Rico credit unions. Prosad, formally the Program for Shares and Deposits Insurance Fund, insured 236 of the commonwealth's credit unions. Warren G. Heller, research director of Wakefield, Mass.-based Veribanc, Inc., said Prosad is $15 million in the red.

About half of the nation's 43 corporate credit unions share senior officials with state credit union lobbying groups. Those groups are affiliated with the Credit Union National Association, the industry's national trade group.

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