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NCUA files notice for possible U.S. Central claims
ALEXANDRIA, Va. (7/2/10)--The National Credit Union Administration (NCUA) announced Thursday it has filed a "notice of claim" with Travelers Casualty & Surety Co. to "preserve NCUA’s right to the full amount of coverage provided under U.S. Central’s Directors and Officers Liability policy." The NCUA announcement noted that there was a June 30 deadline to file the notice of the claim with U.S. Central's liability insurer in order to preserve the agency’s right to seek recoveries under the policy. The procedural move does not mean the agency will necessarily pursue action against individuals. The agency acknowledged the filing is a preliminary step. "NCUA will take the time necessary to complete its investigation and decide at a later date whether or not to initiate civil litigation against any individual directors or officers," the agency release said. Individual notices, called "demand letters," were sent by the NCUA to 18 former U.S. Central directors and officers. The former board included now-incoming Credit Union National Association (CUNA) President/CEO Bill Cheney (then CEO of the California/Nevada Credit Union Leagues), CUNA Chief Operating Officer-Madison John Franklin, and Missouri Credit Union Association President Roshara Holub. "I am confident the record will show that, throughout Bill Cheney's service on the board of U.S. Central, as well as throughout the tenure of John Franklin and Rosie Holub, they took their duties very seriously and participated in meetings of the board out of a dedication to the best interests of the corporate credit union’s members," noted CUNA President Dan Mica. Cheney and Holub served on the board in their capacity as representatives of the American Association of Credit Union Leagues (AACUL) and Franklin as a representative of CUNA. The NCUA Inspector General also is required by law to conduct an independent Material Loss Review of the circumstances surrounding the losses at U.S. Central. The review is being done to determine the causes of U.S. Central’s losses absorbed by NCUA’s Corporate Stabilization Fund; and assess NCUA’s supervision of U.S. Central. A full report will be issued by the Inspector General when the review is complete. U.S. Central was placed under conservatorship on March 23, 2009.


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