Wednesday, September 07, 2011 11:19:00 AM
In a letter to the editor published in the Credit Union Times this week, New Jersey Credit Union League President/CEO Paul Gentile takes on NCUA's legal action against Goldman Sachs for $491 million for losses corporates endured due to mortgage-backed securities, the agency's fourth suit against securities firms.
Gentile gives credit to NCUA for its effort, but states that the suits call for a cost-benefit analysis. "The NCUA needs to be transparent on legal costs and be realistic about the return," says Gentile. "The NCUA should take that same dutiful approach and dedication to the institutions it currently regulates by carefully evaluating the cost-benefit of these suits, and keeping the industry informed on any inordinate hits to the budget." With credit unions watching every penny in this low rate environment, he says, NCUA should be doing the same.
NCUa also faces another issue in its suit according to Gentile: they were the regulator inside those corporates monitoring the investments they are now suing over. "This is clearly a tough road ahead for a regulator that had its own role in the corporate disruption," he states.
Gentile's letter to the editor can be found here.