The former Western Corporate Federal Credit Union board'sdecision to concede the NCUA's March 20 conservatorship came downto fiduciary responsibility.
According to former WesCorp board chair Bob Harvey, the groupmet four times and received counsel from several law firms. Allshared the same opinion: no financial institution has eversuccessfully contested a conservatorship.
The loss of capital smarts for WesCorp members, but a lawsuitwould smart even worse, Harvey said, as credit unions would pay thelegal bills for both sides regardless of the outcome. Asconservator, the NCUA must allow the former board to contest theaction, which includes covering those costs. The NCUA would also befinancially responsible for its own legal defense. Ultimately, theNCUA is funded by federally insured credit unions.
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