Joining a growing chorus citing perceived "conflict of interest" problems on the U.S.Central/WesCorp., takeover, the Washington Credit Union League demanded Thursday NCUA remove a New York investment adviser from future "involvement" and give back fees it received.
Citing an alleged "insider role" the Washington League statement questioned PIMCO's "involvement in the purchase of toxic assets" of the two corporates now under NCUA conservatorship.
"The conflict," said the league "is that as an independent verifier of the potential losses within the corporate credit union system, PIMCO has essentially gained insider knowledge and has now expressed an interest in the 'potential double-digit returns' on investments in the "bad bank assets pool."
That information comes from published reports by the Reuters news agency earlier in the week quoting Bill Gross, chief investment officer, who "outlined that desire" about purchasing the assets, said Stacy Augustine, the league's legal counsel and senior vice president. Officials of PIMCO were not immediately available for comment.
The Washington League statement, said Augustine, does indeed dovetail with a suggestion made today by CUNA President/CEO Dan Mica of possible "legal remedies" against NCUA in connection with the PIMCO's evaluation.
"Mica's statement sounds pretty serious to me," said Augustine. In its statement, the Washington League asked NCUA to "excuse PIMCO from future portfolio evaluations, require PIMCO to return NCUA fees paid for the evaluation and re-evaluate U.S. Central and WesCorp conservatorship in light of potential conflict of interest."
Augustine said she was unaware of other leagues writing letters to NCUA with similar demands but it is an issue that is of great concern to "many of our members."
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