Tuesday, April 20, 2010

Air Force FCU Cited for Improper Membership

NCUA cited Air Force FCU (San Antonio, TX) for improperly adding individuals to the credit union’s membership rolls who were not in its field of membership. NCUA discovered the improper membership during its investigation of the credit union's application to add an underserved area.

The Letter of Understanding and Agreement (LUA) from November 18, 2009 stated:

"The Credit Union previously took an overly expansive view of their field of membership ... As a result, it has accepted share accounts from, and extended loans to, individuals otherwise unqualified for membership, which has had a direct effect on the Credit Union's rapid growth and accounts for a significant percentage of its shares and its loan portfolio. These actions have led to our present supervisory concerns about operations and management."

NCUA states that the credit union between 2002 and 2009 performed inadequate inquiry during the application process as to whether the members qualified for membership. The

Under the LUA, the credit union has agreed to:

1. accurately complete applications for all new members, which must include documentation of how the new member qualifies for membership.

2. submit a resolution that the credit union will limit membership to the 18 groups in its official field of membership.

3. provide the NCUA Regional Director a trial balance of the total loans and shares held by unqualified members.

4. retain the services of an outside audit firm, which will analyze the Credit Union's loans held by unqualified members. This analysis would include "the present value of all loans made to unqualified members and the financial impact that a distress sale ... of these loans would have on the Credit Union.

5. notify its bond insurer, CUNA Mutual Group’s CUMIS, of the addition of members ineligible to join.

6. divest itself of all loans and shares attributable to unqualified members, if so directed by NCUA after reviewing the audir results.

Under the supervisory agreement, NCUA agreed not take formal administrative action against the credit union as long as it makes a good faith effort to comply with the terms of the Agreement.

I'll be interested to see, if NCUA requires the credit union to divest the loans and share accounts of unqualified members.


  1. Hey Keith, why don't you take care of business in your own polluted backyard. All you are is a shill for the big bank boys.

    Quit harassing the credit unions. You and other ABA idiots have been doing this for decades.

    But the truth is willing out.

  2. I've had to edit the following comment because it included profanity.

    Anonymous said...

    Why don't you stick that big nose of your's in your own backyard.

  3. If these two comments are how we as an industry respond to outside criticism, I suspect credit unions have more to fear than the ABA.

  4. Distrust of banks/bankers is the result of all the wrongdoings going on -- on Wall Street as well as Uncle Ben Bernanke's robbery of interest of savers whether their funds go to banks or other institutions.

    Trust no one, no bank, no financial institution, no government. All they want to do is to take from the savers and give to the borrowers and spenders. Savers have been robbed of billions of interest while the Federal Reserve prints money and monetizes the debt.

    About the best one can hope for is to change the elected officials who have promoted their own causes come November 2010.

  5. I know Bob Glenn, a dishonest person who doesn't walk the talk. He runs on an attitude of the ends justify the means.


    "My personal goal is that I'd like to see us attain 6 percent membership growth," he says. "And I'd like to see us attain a 10 percent annual asset growth over the next two or three years.

    "Now, that's a personal goal," he stresses, noting that getting there will not be easy.

    Working for credit unions, he says, has allowed him to focus more on service and value for the members.

    "The credit union is as close as I can get to living that philosophy," he says.


    Well Bob, I brought my concern to you and you worked actively against my interests contrary to the CU's policies.



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