In this case, involving now vacant property in downtown Las Vegas, the decision to file suit “is based on the specific facts and circumstances in each case; there is no blanket policy on NCUA's part,” said John McKechnie, director of congressional and public affairs. The suit seeks recovery of loan payments based on personal guarantees of the borrowers, led by Isaac Norman, a Los Angeles investor.

An article in The Las Vegas Review Journal told of how the Norman group had been led by Ensign to an unidentified broker to borrow the $1.4 million for an office building, which later fell victim to the city's real estate meltdown.

The article focused primarily on the problems borrowers at both banks and CUs experience in dealing with the NCUA and the FDIC in trying to reach settlements. Norman charged that the NCUA “lent a deaf ear” to discussions about the loan.

Separately, the FDIC has forecast it might be filing more borrower suits of its own in light of the continuing spate of bank failures.

In his blog, Leggett of ABA questioned “how did these partners qualify to get a $1.4 million loan from Ensign FCU? Moreover, this is not the first instance of loans going to people who were not credit union members. NCUA has noted that loans went to people who were nonmembers of Norlarco CU and Huron River Area CU and that both credit unions subsequently failed.” He added, “This is very troubling and requires a closer examination of their preferential tax treatment.”