Federal Judge Dismisses Kappa Alpha Psi FCU's Lawsuit against NCUA
U.S. District Court Judge Emmet Sullivan yesterday dismissed a lawsuit by the leaders of Kappa Alpha Psi FCU challenging the NCUA's liquidation of the credit union.
The credit union had alleged that the NCUA "intentionally attempted to summarily liquidate and revoke the chapter of KAPFCU with total and reckless disregard for the truth.'' And the NCUA countered that the judge lacked the authority to overturn the liquidation.
The NCUA had justified its liquidation in August by saying that the Texas-based credit union was inadequately capitalized and there were no prospects for it returning to financial health.
The officials of the credit union claimed that the NCUA never accepted its virtual format. The credit union, which was certified as a community development credit union, operated entirely online.