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Washington
Federations Rosenthal NCUA pushing CU mergers consolidation
WASHINGTON (8/19/10)--In a recent release, National Federation of Community Development Credit Unions (federation) President/CEO Cliff Rosenthal said that “there is a broad and growing feeling among many small credit unions that there is an unwritten agenda to force mergers and consolidation within the credit union industry.” Rosenthal pointed to the National Credit Union Administration’s (NCUA) recent liquidation of Kappa Alpha Psi FCU as one event that “has heightened that perception.” Kappa Alpha Psi earlier this month filed a legal challenge to the NCUA's liquidation order, alleging that the "significant drop" in its net worth ratio that predicated the liquidation was created by assessments charged by the NCUA. The NCUA countered, saying that its liquidation order was well founded and was directly related to the credit union's inability to generate profits, build its net worth, and adequately grant, service, and collect loans. The NCUA on Friday formally liquidated the troubled credit union by distributing all shares held in the credit union to its former members, and the credit union abandoned its injunction request on Wednesday. Rosenthal had backed Kappa Alpha Psi’s challenge, saying recently that “it is important for credit unions who feel that they have been mistreated by their regulators to use all means available, ultimately including the courts, to assert their legal rights and argue their case publicly.” Rosenthal also noted that the federation “receives a steady stream of complaints” from member credit unions CDCUs about examiners acting overly aggressively or inappropriately.


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