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NCUA response in Vensure case due today
WASHINGTON (5/26/11)--Today is the deadline for the National Credit Union Administration (NCUA) to file its response to Vensure FCU's arguments in a lawsuit seeking to delay NCUA's conservatorship of the Mesa, Ariz.-based credit union. Vensure filed a sealed document on May 19, and NCUA has seven days to file its response, according to court documents. Because NCUA would be responding to a sealed brief, it is possible NCUA's response would be sealed also. Vensure had $4.7 million in assets and served 144 members at the time NCUA put it into conservatorship on April 15 (News Now April 18). The credit union sought a temporary restraining order to halt the conservatorship, saying the agency's order was "arbitrary and capricious and threatens to significantly damage or destroy" the credit union (News Now April 27). The case was heard May 11 in the U.S. District Court for the District of Columbia before U.S. District Judge Rosemary Collyer, who indicated she was initially inclined to rule in favor of NCUA and let the conservatorship stand. However, she said she would consider an additional written filing by the credit union before making the ruling. The additional filing was the sealed document. In its original complaint, the credit union said the conservatorship order "contained only cursory and incomplete facts to support the grounds for conservancy and included no exhibits, appendices or empirical data in support." It also said the agency "took possession of the very financial records [the credit union] needs to demonstrate that conservatorship is improper." (News Now April 27). News accounts have said that the credit union was one of 16 financial institutions that allegedly held funds tied to recent Federal Bureau of Investigation actions taken against online gambling sites PokerStars, Full Tilt Poker and Absolute Poker. In its complaint, the credit union admitted it had taken part in poker-related fund transactions and said its work with online poker sites had helped it increase its size from a $150,000 asset credit union to one that held millions in assets. Vensure said it never intended to permanently depend on those revenues, adding its directors had voted recently to stop doing business with the online poker companies. It maintained it would have remained insolvent, even without the funds provided from its relationship with the gambling companies. In announcing the conservatorship, NCUA said the move was to "conserve the assets of a federally insured credit union, protect members' interests, or protect the National Credit Union Share Insurance Fund." Vensure FCU serves employees of Vensure Employer Services Inc., employees of various related companies and their families.


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