WEST DES MOINES, Iowa–A large number of Iowa credit unions and the Iowa Credit Union League have filed suit against NCUA seeking to recover funds invested by the former Iowa Corporate Central Credit Union in the now defunct U.S. Central Credit Union.
The plaintiffs, which include in addition to the league 1st Gateway CU, Cobalt Credit Union and Wisconsin-based Marine Credit Union, are seeking to recover more than $4 million they say they are owed from assets that were recovered since the agency placed Kanas-based U.S. Central into conservatorship in 2009, one of five corporates that were seized by the agency as part of what would become known as the corporate credit union crisis.
The credit unions, who were Membership Capital Account holders in the corporate, are being represented by Foulston Siefkin in the suit that was filed in Kansas District Court.
The case seeks to recover proceeds from the defendants’ liquidation claims.
North Dakota CUs Sue NCUA
The litigation is the second lawsuit filed against NCUA seeking to recover funds from a failed corporate.
As CUToday.info reported here, 25 North Dakota credit unions have filed a lawsuit against the alleging the agency is withholding more than $10 million owed them as part of the resolution of the failed corporate credit unions.
As CUToday.info further reported, the credit unions allege the funds are being withheld over a “technicality” being cited by NCUA. As explained in the report, prior to the financial collapse in 2008–2009, the largest corporate credit union in the United States, U.S. Central Federal Credit Union (U.S. Central), provided services to other corporate credit unions, including Midwest Corporate, acting as a "corporate credit union's credit union."
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