The Regulator is Not To Blame
Yesterday afternoon, a court in California ruled that former WesCorp CEO Robert Siravo was not entitled to depose NCUA Chairman Debbie Matz and former board member Gigi Hyland as part of his efforts to defend himself against NCUA’s lawsuit claiming he should be personally liable for negligent oversight of the corporate in the period leading up to the meltdown. NCUA is arguing, among other things, that the corporate recklessly overweighted its investment portfolio with residential mortgage-backed securities.
Siravo pointed out in seeking the depositions that, in a speech and presentation in 2010, NCUA Chair Debbie Matz confirmed that much of the blame for the problems with RMBS investments lies outside of the corporate credit unions, and that these investments were perceived by the NCUA and others in the industry to be reasonable, safe investments before the economic melt-down in 2008. In late 2008, in the midst of the economic crisis, NCUA Board member Gigi Hyland made statements reflecting her belief that corporate credit unions, including their RMBS investments, were doing “just fine.” Siravo argued that these statements cut at the heart of the NCUA’s theory that somehow he should have figured out the problems with RMBS faster than anyone else, even the governing agency that was responsible for overseeing the industry.
