August 24, 2014

Court decision allows NCUA to pursue recovery

Aug. 20, 2014 – The Tenth Circuit Court of Appeals issued an order Tuesday reaffirming its previous denial of a motion to dismiss an NCUA case on behalf of a credit union it had under conservatorship, allowing the agency to continue to pursue recovery in the case.

NCUA filed suit against Nomura Home Equity Loan, Inc. in the Tenth Circuit, and the court denied Nomura's call for the case to be dismissed based on a state-level statute of limitations, saying that the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA) established a "universal time frame" which the agency had abided by. A Supreme Court decision remanded the lower court's decision this June, but the lower court reinstated its previous opinion.

NAFCU Senior Vice President of Government Affairs and General Counsel Carrie Hunt responded, "The Court's decision is a positive step which allows NCUA's lawsuits to go forward in their efforts to recover losses on behalf of credit unions. NAFCU has long urged NCUA to leave no stone unturned in attempting to make our members whole by recouping some of the cost of corporate stabilization assessments. NAFCU fully supports any and all NCUA legal action aimed to reach culpable parties and potentially return monies to federally insured credit unions."

NAFCU continues to support NCUA's efforts to pursue remedies in order to offset the possibility of future assessments. In July, NCUA staff said the numbers for the Temporary Corporate Credit Union Stabilization Fund indicate that credit unions are unlikely to face any more corporate stabilization assessments going forward – a result NAFCU has long pushed for.