The National Credit Union Administration issued an Order to Cease and Desist to People for People Community Development Credit Union of Philadelphia. The order requires the credit union to take the following actions:
1. Complete a financial statement audit;
2. Charge off uncollectible loans;
3. Properly fund the Allowance for Loan and Lease Losses;
4. Collect on delinquent loans guaranteed by a third party;
5. Reconcile general ledger accounts monthly; and
6. Establish and maintain a Bank Secrecy Act compliance program.
The $1.1 million credit union was significantly undercapitalized as of September 30, 2011. The low-income designated credit union reported that 16.64% of its $519 thousand in loans were 60 days or more past due and that it had a net charged-off rate of 19.23%.
Read the order.
At the end of the third quarter of this year, the credit union’s delinquent loan ratio was 16.6%, following 27.8% in the second quarter and 10.7% in the first quarter.
ReplyDeleteIts return on average assets was -3.3% at the end of the third quarter, 2.3% at the end of the second quarter and -1.1% at the end of the first quarter.
The 1,561-member credit union’s net worth ratio was 3.6% at the end of the third quarter, 6% at the end of the second quarter, and 5.5% at the end of the first quarter.
Why just a Cease-and-Desist Order? Why not remove the CEO from this credit union? They have done it to better looking credit unions. These Community Development credit unions need to be watched monthly ….
Stick a fork in it. It's done.