An NCUA proposal to encourage non-federally insured credit unions to pay into the Temporary Corporate Credit Union Stabilization Fund violates a federal statute banning extortion by government employees, according to a comment letter filed on behalf by American Share Insurance.
"There is nothing 'voluntary' about a payment that is conditioned upon a threat," wrote Steven W. Tigges, a Columbus, Ohio-based lawyer representing ASI.
He cited a 1947 federal appeals court decision in saying that such a provision would amount to "an oppressive use of official position" to force non-federally insured credit unions to "part with something of value unwillingly and involuntarily."
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