Complete Accounting Demanded Of U.S. Central Failure

Credit Union Journal Daily Briefing  |  Friday, October 22, 2010

WASHINGTON – NAFCU said yesterday it was unsatisfied with a 28-page report detailing the failure of U.S. Central FCU and demanded a complete accounting of why the one-time $52 billion corporate failed, costing credit unions as much as $7 billion.

NAFCU President Fred Becker expressed continued frustration and renewed the call for complete and total accountability on behalf of natural person credit unions for why U.S. Central failed and why the NCUA itself – despite having examiners onsite – did not foresee problems and respond sooner to avert the largest collapse in credit union history. “Given the nature and extent of these losses, virtually unlimited resources should have been provided to the Office of Inspector General to determine the cause of this loss,” said Becker, referring to the Material Loss review released yesterday. “Unfortunately, the 28-page report issued today reveals very little new information and frankly does not provide much guidance for fixing what went wrong.”

The report blamed NCUA examiners, as well as the U.S. Central management and board, but makes no recommendations for disciplinary actions and mentions no names. To date no one has been disciplined or fired by NCUA over the biggest credit union failure ever.

CUNA, which controlled the board of U.S. Central, with two of its nine seats, including one reserved for CUNA President Dan Mica and one for CUNA’s state league affiliates, did not comment on the report yesterday.