WASHINGTON - Senate Banking Committee Chairman Alfonse M. D'Amato will hold a hearing Feb. 28 to investigate the government's seizure of ailing Capital Corporate Federal Credit Union.

The move calls into question once again the National Credit Union Administration's supervision of the industry's liquidity centers.

"I am shocked at the irresponsibility of the management of this credit union in pursuing such highly leveraged investment strategies," the New York Republican said in a Feb. 2 release. "Moreover, the credit union regulators . . . apparently knew of the risky holdings and did not take strong, firm action that could have avoided the largest conservatorship in credit union history."

The NCUA put Cap Corp into conservatorship last Tuesday, after discovering that the Lanham, Md., institution had suffered huge losses from mortgage derivative investments.

Robert E. Loftus, director of public and congressional affairs for the NCUA, said the agency will be "pleased to appear" before the committee.

These hearings come hot on the heels of last year's unprecedented congressional scrutiny of credit unions. Those hearings were triggered by disclosures that U.S. Central Credit Union had invested $255 million in a troubled Spanish bank. U.S. Central, the industry's primary liquidity facility, didn't lose any money on the investment.

Rep. Henry B. Gonzalez, D-Tex., who called last year's hearings, also is urging House Banking Committee Chairman Jim Leach to probe Cap Corp's problems. The Iowa Republican may hold a hearing, according to an aide.

"I would imagine we would have some sort of hearings on that," the aide said, adding that no dates have been set and hearings might be held at the subcommittee level.

The Feb. 28 Senate Banking Committee hearing will focus on four topics:

* How the credit union could experience such losses.

* The adequacy of the NCUA's examination.

* The impact of these and future losses on consumers, the industry, and taxpayers.

* The need for remedial legislation.

Cap Corp ran into a liquidity crunch late last year after suffering unrealized losses of up to $100 million from investments in collateralized mortgage obligations. The CMOs represented more than half of the $1.4 billion-asset corporate's investments.

The NCUA did not catch the problems until October, although it had conducted an off-site examination of the corporate in September.

"It's an example of poor supervision," said a House Banking Committee aide. "How did they let them get into that?"

The action is expected to cost the insurance fund $26 million and about half of the 483 Cap Corp members could lose $37 million in capital deposits. The agency has guaranteed that no other credit union deposits will be lost.

NCUA Chairman Norman E. D'Amours admitted in an interview that Cap Corp had "slipped through the cracks," but he said that corporate supervision has improved dramatically under his watch and continues to improve.

Agency sources have differing forecasts of Cap Corp's future. Some claim the NCUA is looking at a range of options - liquidation, merger, or a returning to operation - but others said the regulator is determined to close the institution.

Cap Corp's fate could hinge on what happens today after the NCUA lifts a withdrawal freeze that Cap Corp imposed on Dec. 7 when it couldn't meet depositor demand.

"If everyone comes in and takes money out, we'll have a bigger problem," an agency source said. "If everyone leaves money in, it'll be an easier problem to solve."

Meanwhile, Congress may not be the only outside body that will be putting Cap Corp under the microscope.

Besides investigating for possible improprieties, the NCUA has informed the Securities and Exchange Commission of the matter, sources said. The SEC might investigate whether transactions between the brokerage firm Alex. Brown & Sons Inc. and Cap Corp were at arm's length.

Cap Corp purchased most of its CMOs from Alex. Brown, the agency said. Howard L. Schwartz, the broker-dealer who worked most closely with Cap Corp, was once the corporate's investment officer.

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