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N.Y. Fed Report Stirs Corporate CU Failures

NCUA says onsite WesCorp and other corporate examiners were limited by regs, not influenced by executives.

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Regulatory capture, a phenomenon where the regulated dominate the regulators and unduly influence their actions, did not play a role in the corporate financial crisis that eventually cost credit unions billions of dollars, according to the NCUA.

Instead, the agency said that when it rewrote corporate credit union regulations in 2002, it neglected to address risk concentration adequately and allowed corporate credit unions too much authority in developing investment strategies, given how complex and little understood many of the investments were at the time.

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