THE CO-OP BANK

1630 CONNECTICUT AVENUE, N.W., WASHINGTON, D.C. 20009 (202) 745-4600

THE CO-OP BANK

1630 CONNECTICUT AVENUE, N.W., WASHINGTON, D.C. 20009 (202) 745-4600

PERNAND J. ST GERMAIN, RL CHAIRMAN

HENRY S. REUSS, WIS.

HENRY. 8 GONZALEZ, TEX

JOSEPH G. MINISH, NJ.

PRUNK ANNUNZIO, ILL

PARREN J. MITCHELL, MD.
WALTER & FAUNTROY, D.C.
STEPHEN NEAL, N.C.

JERRY M. PATTERSON, CALIF.
JAMES J. BLANCHARD, MICH,
CARROLL HUBBARD, JR, KY.
JOHN J. LAPALCE, N.Y.
DAVID W. EVANS, IND.
NORMAN E. D'AMOURS, N.M.
STANLEY N. LUNDINE, N.Y.

MARY ROSE CAKAR, OHIO

JIM MATTOX, TEX.

BRUCE F. VENTO, MINN.

DOUG BARNARD, JR. GA.

ROBERT GARCIA, N.Y.

MIXI LOWRY, WASH,

CHARLES & SCHUMER, NY.

BARNEY FRANK, MASS.

BILL PATMAN, TEX.

WILLIAM J. COYNE PA.

STENY H. HOYER. MD.

WASHINGTON,D.C., Dec. 22 - Chairman Fernand J. St Germain of the House Banking, Finance and Urban Affairs Committee today released a report by the General Accounting Office finding that there was a violation of the National Consumer Cooperative Bank's conflict of interest regulations in a $5.2 million loan to the Dunbar Housing Cooperative in New York.

The conflict involved Frances J. Levenson, who served simultaneously as a member of the board of directors of the National Consumer Cooperative Bank and as an officer of the New York Bank for Savings which held the first mortgage on the property and whose officers controlled the cooperative.

The General Accounting Office, however, found the cooperative was an
eligible co-op borrower from the National Consumer Cooperative Bank despite
the fact that no tenant-members were involved in the cooperative at the time
the loan was approved on December 15, 1980. The GAC thus upheld the Bank's
contention that the NCCB Act empowered the institution to dispense loans to
"embryonic" cooperatives Tacking members so long as the charter of the
cooperative provided for ultimate member contro and ownership.

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