Online Only: Vensure FCU Was Most Publicized CU Closing of 2011
There were 15 credit unions that the NCUA liquidated or assisted in their being purchased in 2011, but only one involved Internet gambling and litigation.
In July, the NCUA liquidated the $8.1 million Vensure Federal Credit Union, which made most of its money by processing transactions for Internet poker sites.
The agency conserved the credit union earlier in the year after the owner of its largest deposit account, the Trinity Global Commerce Corp., was seized by the government as part of a crackdown and closure of major online poker sites. Then Vensure sued the agency to fight the conservatorship and liquidation, though a judge ruled in a favor of the agency.
The question over the legality of online poker and transacting payments for online poker largely muddled the court proceedings, with the CU arguing that it had provided the agency with many legal opinions justifying the legality of processing online poker transactions and that it had complied with the agency's order to cease and desist from them.
The agency countered that it had not done so fast enough and remained at risk. The largest cost to the NCUSIF ($21.1 million) came after the agency liquidated the $119 million Family First FCU of Orem, Utah and its assets, liabilities and members were purchased and assumed by Security Service FCU of San Antonio.
The second largest hit to the NCUSIF ($13.5 million) came after Western Federal Credit Union purchased and assumed the assets of the $88 million Oakland Municipal Credit Union after the NCUA was named Oakland Municipal's liquidating agent.