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Decision and Order on Appeal Cambria Federal Credit Union

April 2009
Decision and Order on Appeal Cambria Federal Credit Union
Insurance Claim

All redactions made pursuant to exemption (b)(6) of the FOIA – personal privacy



In the Matter of [redacted]

Insurance Claim

Docket BD-10-08

Decision and Order on Appeal


This matter comes before the National Credit Union Administration Board (Board) pursuant to 12 CFR 745.202, as an administrative appeal of the determination by the Agent for the Liquidating Agent of Cambria Federal Credit Union denying the [redacted] insurance claim in the amount of $[redacted].

Cambria Federal Credit Union

Cambria FCU, formerly known as Saint Rochus FCU, was chartered in 1969 to serve the members of Saint Rochus Catholic Church in Johnstown, Pennsylvania. The credit union changed its name to Cambria FCU in 1990 after it merged with Holy Name FCU in 1984. NCUA placed the credit union into involuntary liquidation on June 25, 20071 due to insolvency. Extensive fraudulent activity involving the long-time manager has been alleged including misappropriation of member deposits, loan proceeds, and a credit union asset. Recordkeeping had been a problem at the FCU for several years.

[redacted] Accounts

[redacted], husband and wife, were members of Cambria FCU for many years. [redacted] served on the board of the FCU for several years. The [redacted] had several share and loan accounts at the FCU.

AMAC worked extensively with the [redacted] to determine the balances in their share and loan accounts after the liquidation. AMAC believes that part of the problem may have been due to the alleged fraudulent activities of the former manager; she may have manipulated accounts, including the [redacted] accounts, in her efforts to defraud the FCU.

Deposits and transfers of funds were noted on member account statements, but due to possible manipulation of accounts/account statements by the manager, AMAC requested verification of transactions from the [redacted] as well as other members. Due to the lapse of several years since some of the account transactions, verification was not always possible. AMAC relied on the [redacted] affidavits, along with member account statements, for many of their account transactions. AMAC clearly erred in favor of the [redacted] in making these determinations outside of this appeal.

The account at issue is share account #[redacted], in the name of [redacted]. AMAC made its initial determination on account #144 on May 19, 2008. The closing balance in the account was determined to be $2003. AMAC also determined that the [redacted] had two outstanding delinquent loans at the time of liquidation – one with an outstanding balance of $[redacted] (original loan amount) and one with an outstanding balance of $[redacted] (original loan amount $[redacted]). The larger loan was share secured by account #[redacted]. AMAC used the closing balance of $[redacted] to pay down the larger delinquent loan. [redacted] has since paid off that loan. The $[redacted] outstanding delinquent loan (an automobile loan) remains unpaid and is not subject to Board appeal. AMAC also denied the [redacted] claim that $[redacted] should not have been debited from account #[redacted] and is the sole issue for appeal.

This amount was transferred from account #[redacted] in several transactions between May 31, 2005 and December 31, 2005. The transfers were made to pay down delinquent loans made to [redacted]l’s two adult daughters.2 The [redacted] do not question that the pay downs were made. However, the [redacted] state that they did not authorize these pay downs. It is noted in the FCU board minutes several times between 2003 and 2006 that [redacted] was paying on his two daughters’ loans. [redacted] was a member of the board of directors and present at two of the meetings where it is stated that debtors’ father ([redacted]) was paying on these loans. There is no evidence that the [redacted] questioned these pay downs prior to the FCU being placed into liquidation. We do not believe there is adequate evidence to reverse these transfers totaling $[redacted]. The board minutes are adequate verification that [redacted] approved of the transfers.

The [redacted] requested reconsideration which AMAC denied on September 5, 2008. They submitted no further evidence with their October 30, 2008 appeal. AMAC’s decision not to reverse the $[redacted] in transfers that was used to pay down [redacted]’s daughters’ loans was the correct one based on the evidence submitted.


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

The Board upholds the agent for the liquidating agent’s decision and denies the appeal of [redacted].

The Board’s decision constitutes a final agency determination. Pursuant to 12 C.F.R. 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 district court for the Federal judicial district 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.

So ORDERED this 21st day of April 2009 by the National Credit Union Administration Board.

Mary Rupp
Secretary of the Board

1 NCUA named itself as the liquidating agent; various AMAC staff was named as agent for the liquidating agent. References in this memo to AMAC refer to those staff in their capacity as agent for the liquidating agent.

2 The two daughters were step-daughters to [redacted].

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