NCUA and a black-founded credit union (Part I of II)
In 2010 NCUA’s regulatory activity reigned unchecked. Even though the economy was on the mend its penchant for shutting down credit unions was unabated. It would ultimately lead to the liquidation of five corporate credit unions in September—the most catastrophic decision in credit union history.
On August 3rd, 2010, six years after founding, Kappa Alpha Psi FCU ($750K, Dallas, Tx) fell under NCUA’s knee having been served a surprise order of liquidation and charter revocation.
In the regulatory environment, one might assume this was just another small credit union falling prey to economic circumstances. But then something happened that no other credit union had dared in this situation. The credit union appealed NCUA’s action, filing a complaint contesting the order on both factual and constitutional grounds.
KAPFCU requested a temporary restraining order against NCUA: “Petitioner fears that before a show cause hearing can be held, the Respondent will complete what has already been threatened, and that is to hastily liquidate assets, expend money, enter or break contracts and disrupt the ongoing operations of the credit union.”
continue reading »