When asked for their opinion, most credit union leaders clammed up on the topic of the NCUA’s recent cease and desist order against three former corporate executives.
However, most who did speak out were critical of the decision to ban former Western Corporate Federal Credit Union Chief Investment Officer Robert Burrell, former U.S. Central Federal Credit Union President/CEO Francis Lee and former Members United Corporate Federal Credit Union President/CEO Joseph Herbst from corporate credit unions, but not natural person credit unions.
Herbst is currently employed as senior vice president and chief strategic officer at the $2.3 billion Affinity Federal Credit Union in Basking Ridge, N.J., while Burrell has his own ALM advisory firm.
“It just doesn’t sit right,” said Chuck Bruen, industry blogger and president/CEO of the $962 million First Entertainment Credit Union of Hollywood, Calif.
“It seems weak. If they can’t work for a corporate, why let them work for a credit union?” Bruen said. “Maybe I would have done the same thing if I were the NCUA, but it just seems odd that you could go be an executive for a big credit union, but you can’t be involved with a corporate. Why even bother? They were just making a statement, I guess.”
Stuart Perlitsh, president/CEO of the $325 million Glendale Area Schools Federal Credit Union, who was the original plaintiff in a lawsuit against former WesCorp executives and directors, said he doesn’t think the order provides enough accountability for corporate losses.
“They made huge, incompetent investment decisions, and now they have the license to do the same at credit unions as large as Navy, Pentagon, SchoolsFirst, Golden 1, and other billion-dollar credit unions,” Perlitsh said. “It just doesn’t compute.”
Perlitsh said he’s spoken with a colleague at a billion-dollar credit union who received a call from Burrell, pitching ALM consulting.
“He politely declined the invitation,” he said.
California and Nevada Credit Union League President/CEO Diana Dykstra said she hasn’t received feedback from members on the issue, although she acknowledged some league members, who were former WesCorp members, are still angry about the losses.
“Maybe some are still angry and want to hang all of those involved, but for the most part, I think people have moved on,” she said.