NCUA Sued Over Insurance Coverage in St. Paul Croatian Collapse
Two former members of the now-defunct St. Paul Croatian FCU are suing the NCUA saying the agency’s insurance coverage level isn’t adequate.
Steve Skertic and his wife, Marija, contend the agency owes them an additional $165,000 in addition to the $865,000 it has already paid them for five accounts they had at the credit union when it was conserved and liquidated last year.
The suit was filed in U.S. District Court in Cleveland where the Skertics live. Before it was closed last year, the credit union was headquartered in the Cleveland suburb of Eastlake.
The couple contended that none of their individual accounts had more than $250,000 – the maximum amount that is insured in any one account – and that they carefully set up the accounts to comply with the law.
However, when it turned down the request for additional money in an administrative procedure, the NCUA said the Skertics added friends as joint account holders to extend coverage but the friends have to share the $250,000 payout for the account.
The failure of St. Paul Croatian Federal Credit Union cost the NCUSIF $170 million. A grand jury has already indicted 16 people grand jury on charges related to fraud involving the credit union which at one time had assets of $240 million.