The National Credit Union Administration has barred the former CEOs of U.S. Central FCU and Members United Corporate FCU from working for, or with any corporate credit union for their roles in two of the biggest credit union failures.
Both CUs went bust because of faulty MBS investments.
Francis Lee, the former CEO of U.S. Central, the one-time $52-billion central bank for credit unions, and Joseph Herbst, the former chief of $14-billion Members United, agreed to the bans.
U.S. Central and Members United were among five corporates that failed in 2009-2010 at an estimated cost of $16 billion to $20 billion to the credit union movement. The other failures were WesCorp FCU, Southwest Corporate FCU and Constitution Corporate FCU.
The corporate bans are identical to one announced yesterday by Robert Burrell, the former chief investment officer at WesCorp FCU, and by the former CEO of CapCorp FCU, the 1994 corporate failure.
Both orders, which bar the two corporate figures from becoming an employee of, holding any office in, or otherwise participating in any manner in the conduct of the affairs of any federally insured corporate credit union; consulting or advising any federally insured corporate credit union on any matters involving or relating to investment securities, investment policy, or investment strategy; or selling any investment securities to any federally insured corporate credit union; were part of the settlement of potential civil claims to be brought by NCUA.
