Decision and Order on Appeal D Edward Wells Federal Credit Union

UNITED STATES OF AMERICA

BEFORE THE NATIONAL CREDIT UNION ADMINISTRATION

In the Matter of [redacted]

Insurance Claim

Docket BD-07-05

Decision and Order on Appeal

Decision

This matter comes before the National Credit Union Administration Board (Board) pursuant to 12 C.F.R. 745.202, as an administrative appeal of the determination by the agent for the liquidating agent of D. Edward Wells Federal Credit Union, denying [redacted] claim.

Background and Claim

D. Edward Wells Federal Credit Union (FCU) was chartered in 1959. It was a low-income credit union chartered to serve the members of the Mt. Calvary Baptist Church and Brotherhood of Springfield, MA, immediate family members and organizations of such persons. The FCU historically had persistent problems in the areas of capital adequacy, earnings and management. The FCU was placed in conservatorship on February 21, 2003. During the conservatorship, NCUA staff discovered that the FCU was insolvent. The NCUA Board placed the FCU into liquidation on May 17, 2003.

[redacted] name did not appear on the FCU’s records as a current member at the time of the liquidation. Because [redacted] was not a current member, NCUA’s Asset Management and Assistance Center (AMAC)¹ did not notify [redacted] of the liquidation. AMAC first became aware of [redacted] claim when [redacted] wrote to them on November 3, 2003. Enclosed with [redacted] letter was a copy of a cancelled check for $47,409.15 [redacted] deposited in the FCU in May, 1996. [redacted] claims [redacted] put $30,000 of this deposit into a share certificate in the FCU and withdrew no more than $10,000 from [redacted] original deposit. Throughout various correspondences with AMAC and the Board, [redacted] claims there should have been a balance of between $30,000 and $35,000 in [redacted] FCU account upon liquidation.

AMAC reviewed the credit union records and found an electronic copy of a statement for [redacted] account. The statement covers the period from January 1, 1997 to June 30, 1999, and shows a zero balance as of May 9, 1997. Upon further research at the liquidated FCU, AMAC obtained copies of withdrawal slips and checks evidencing withdrawals from [redacted] account. Upon completion of its research, AMAC sent [redacted] a reconstruction of [redacted] account, denying [redacted] claim. [redacted] responded, requesting AMAC reconsider its denial, enclosing an affidavit indicating that all [redacted] signatures on the withdrawal forms and checks were forgeries. AMAC then hired a forensic specialist to determine whether [redacted] endorsements on the checks and withdrawal forms were [redacted] own or were forged. The forensic specialist concluded that the signatures were those of [redacted] and were not forgeries. Based on the forensic specialist’s conclusions and on its reconstruction of account, on May 26, 2005, AMAC issued its reconsideration, again denying [redacted] claim for share insurance. AMAC noted in its denial that [redacted] had 60 days from May 26 to file a written appeal to the NCUA Board (appeal deadline July 25, 2005).

The Board did not receive an appeal from [redacted] by the July 25, 2005 deadline. [redacted] contacted the Board Secretary in August 2005 concerning [redacted] appeal rights, stating that [redacted] mailed [redacted] appeal to the Board within the appropriate timeframe. [redacted] then sent the Board Secretary a copy of an appeal letter dated June 6, 2005, which the Board Secretary received on September 1. 2005. The original June 6th appeal letter has not been located. We accepted [redacted] appeal based on the June 6th date, however the Board’s time to render a decision on the appeal is based on September 1st, the date the Board Secretary received a copy of the June 6th appeal.

On January 3, 2006, [redacted] submitted book II (of II) of [redacted] original passbook to the Board. Although submitted in support of [redacted] claim, the passbook instead supports AMAC’s reconstruction of account and its denial of [redacted] claim. All of the transactions noted in the passbook are found in AMAC’s reconstruction of account. The passbook indicates that [redacted] closed [redacted] account on May 9, 1997 by making a withdrawal of $10,391.61. Again, this comports with AMAC’s reconstruction.

[redacted] has provided no basis for [redacted] claim. In fact, [redacted] recent submission of [redacted] original passbook supports AMAC’s reconstruction of account and denial of [redacted] claim.

Order

For the reasons set forth above, it is ORDERED as follows:

The Board upholds the Liquidating Agent’s decision and denies [redacted] appeal.

The Board’s decision constitutes a final agency determination. Pursuant to 12 CFR 745.203(c), this final determination is reviewable in accordance with the provisions of Chapter 7, Title 5, United States Code, by the United States Court of Appeals for the District of Columbia or the court of appeals for the Federal judicial circuit where the credit union’s principal place of business was located. Such action must be filed not later than 60 days after the date of this final determination.

The Board’s decision constitutes a final agency determination.

So ORDERED this 19th day of January, 2006 by the National Credit Union Administration Board.

Mary Rupp 
Secretary of the Board

¹ All references to AMAC in this decision refer to it in its capacity as agent for the liquidating agent.