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Litigation efforts on hold options explored Mica
WASHINGTON (3/31/09)—The legal team at the Credit Union National Association (CUNA) has determined that a variety of options are available to seek answers from the National Credit Union Administration (NCUA) about its actions involving corporate credit unions, and CUNA said it would not file a legal challenge at this time. CUNA President/CEO Dan Mica issued a statement that the association decided against challenging the NCUA’s appointment of conservators for U.S. Central FCU and Western Corporate FCU (WesCorp) because the 10-day timeframe for filing could force haste. Mica said CUNA is committed to keeping as many options open as possible in obtaining answers for credit unions from NCUA about how it reached the conclusions it did for conserving U.S. Central and WesCorp – including through Congress, the regulatory process and the courts. Mica said CUNA’s legal research has determined that other legal remedies are available that are likely to be more fruitful if CUNA decides to go to court. In addition, he said, these other remedies are not subject to the 10-day deadline that applies to challenges to conservatorships. This would avoid pressure to make the kind of hasty legal decisions that would have been necessitated by a decision to file a case today, Mica said. Mica emphasized that CUNA continues to believe there is much NCUA can do unilaterally to mitigate the financial impact of its Corporate Stabilization Program on natural person credit unions. “We hope that a combination of initiatives by NCUA, plus legislation if possible, will make litigation unnecessary,” Mica said. "But that remains an avenue open to us." CUNA General Counsel Eric Richard said Monday that NCUA’s legislative proposal to create a stabilization fund goes a long way to address the problems facing the corporate credit union system, as well as allowing natural person credit unions to spread out premium payments over several years. He said CUNA intends to work with the National Association of Federal Credit Unions to work to persuade the NCUA to expand its legislative proposal to include authority to allow the Central Liquidity Facility to lend money directly to corporate credit unions, and to raise NCUA’s borrowing authority above the $6 billion the agency has requested.


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