A federal appeals court ruled against the NCUA last week in a bond insurance claim dispute stemming from the $72.5 million fraud case of the St. Paul Croatian Federal Credit Union.

The U.S. Court of Appeals for the Sixth Circuit on May 18 affirmed a lower court decision that CUMIS Insurance Society Inc. was not obligated to pay a $5 million insurance bond claim to the NCUA. In its 2-1 decision, the Cincinnati appeals court ruled the fidelity bond had been terminated well before it took effect in 2010 because a credit union director knew of an employee’s dishonesty before 2010.

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Peter Strozniak


Credit Union Times

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