CLEVELAND, Ohio (2/23/12)--An Ohio church filed a motion Feb. 16 in a federal court seeking documents that it says were withheld by the National Credit Union Administration (NCUA) in the church's lawsuit against the agency over the church's losses when St. Paul Croatian FCU, Eastlake, Ohio, collapsed in 2010.
The church, Holy Love Ministries, based in North Ridgeville, Ohio, had filed the lawsuit in the U.S. District Court for the Northern District of Ohio Eastern Division against NCUA on June 17. At the time the credit union was liquidated by NCUA on April 20, 2010, the church had two joint accounts totaling $1.7 million with multiple co-signers on the accounts but received only the $250,000 insurance payment available to single accounts, according to the church's complaint.
It is suing to recoup the $1.5 million remaining or at least a second $250,000 payment because the two accounts were joint accounts, according to court document.
The complaint said that several days before the credit union's collapse, a church representative tried to withdraw funds from the accounts but was told not to by NCUA. As a result, said the court document, the church's two-year $12 million building project was endangered and "the loss has rendered Holy Love's situation desperate." The church was also denied a "hardship" exception to the $250,000 insurance limit, said the court documents.
In the motion to allow discovery filed with the court on Feb. 16, Holy Love said NCUA had not produced documents the church needed to proceed with its case and prove it could "demonstrate significant bad faith and improper behavior" by the agency.
It cited as "fraudulent" behavior, the agency's refusal to allow a church representative to withdraw funds several days before the involuntary liquidation even though agency representatives knew about the pending conservatorship, said the motion filed. The church also alleged in the document that the agency failed to call the church, as it had done with several other members, to allow it to restructure accounts with balances over $250,000 so it could obtain more insurance coverage.
NCUA's National Credit Union Share Insurance Fund lost $170 million when the credit union collapsed due to fraudulent activities of its leaders. It was one of the largest credit union failures in history.