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CU System
St. Paul Croatian depositors sue NCUA
CLEVELAND (5/18/11)--Two former members of St. Paul Croatian FCU, the now defunct Eastlake, Ohio, credit union, are suing the National Credit Union Administration (NCUA) in federal court, alleging NCUA erred in calculating their accounts and that the deposit insurance money paid to them was inadequate. Plaintiffs Steve and Marija Skertic owned several joint accounts at the credit union and are petitioning the U.S. District Court for the Northern District of Ohio, Cleveland, for additional payment of $164,000 from NCUA. NCUA had to liquidate St. Paul Croatian in April 2010 because of fraud. The failure cost the National Credit Union Share Insurance Fund $170 million. A grand jury already has indicted 16 people on charges related to fraud at the credit union (News Now March 4 and May 17). According to court documents, the balance of the Skertics’ joint account with St. Paul Croation on the liquidation’s date of April 30, 2010, was $718,330. NCUA determined that only $553,844 of the Skertics’ joint accounts was insured, and paid that amount to them on June 24, 2010. The balance of $164,486 was deemed uninsured and was not returned, the complaint said. On March 17, NCUA denied the Skertics’ appeal regarding the deposit payment, upholding the liquidating agent’s decision. Under NCUA rules governing share insurance, the Skertics could have simply moved money from some of their accounts to other accounts to be fully insured. However, NCUA and St. Paul Croatian FCU told the Skertics their accounts were fully insured, the complaint said. They claim NCUA’s action violates Section 745 of its rules regarding notice of insurance coverage of member accounts and that it violated the fifth and fourteenth amendments of the U.S. Constitution regarding deprivation of property without due process.


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