The former board members of Western Corporate Federal Credit Union announced yesterday that they wouldn’t mount a legal challenge against NCUA’s decision to place WesCorp into conservatorship.
The board said in a statement that any litigation “would be very problematic and the cost extraordinarily high given the likely outcome.”
NCUA placed WesCorp and U.S. Central Federal Credit Union into conservatorship on March 20 after determining from stress tests that both had “an unacceptably high concentration of risk.”
The decision, coupled with previous actions that the agency had taken to shore up the corporate credit union system, will cost the NCUSIF $5.9 billion, and result in additional costs to natural person credit unions to replenish the insurance fund.
Former WesCorp Board Chairman Bob Harvey said the best way to minimize losses to the insurance fund and to member credit unions is to “support the NCUA in its strategy to hold US Cental and WesCorp investments to maturity.”