Credit Union Regulator Faces Allegations

House Banking Committee Chairman Henry B. Gonzalez has asked the nation’s top credit union regulator to answer allegations of favoritism involving contracts with the National Credit Union Administration.

Gonzalez (D-Tex.) asked Roger W. Jepsen to explain why a campaign contributor to Jepsen’s unsuccessful campaign for reelection to the Senate received a lucrative contract from the agency to collect troubled credit union loans.

The allegations surfaced last month in the Credit Union Information Service, a Maryland-based industry newsletter.

The National Credit Union Administration regulates the nation’s federally chartered credit unions and runs a deposit insurance fund similar to that of the Federal Deposit Insurance Corp.

Jepsen was traveling and not available for comment, agency spokesman Bob Loftus said.

Loftus said Jepsen “is preparing a full and comprehensive response to the allegations,” which should be forwarded to Gonzalez by May 24. “That’s the only response he’s going to have at this point,” Loftus said.

The Credit Union Information Service, citing interviews, surveys of federal records and Freedom of Information Act requests, reported on a National Credit Union Administration contract with CIC Plan Inc. of Des Moines, Iowa.

CIC, a loan collection agency, for about four years has had a contract with the credit union administration’s Asset Liquidation Management Center in Austin, Tex., to collect problem loans from troubled credit unions. CIC “has received $1,576,744 in commissions from the (Asset Liquidation Management Center) since 1990 alone,” the newsletter said agency records showed.

Loftus neither confirmed nor denied that figure, saying Jepsen’s letter to Gonzalez will address the issue. Two other companies have similar loan collection contracts.