Lithuanian CU Placed Under Enforcement Order

The California Department of Financial Institutions (DFI) has entered into an enforcement order with Lithuanian Credit Union of Los Angeles, California.

The enforcement order cited numerous safety and soundness violations at the credit union.

Below are some of the concerns noted by the DFI.

The order instructs the credit union to retain management and maintain a Board of Directors that is acceptable to the Commissioner of Financial Institutions.

The credit union was ordered to develop and implement appropriate allowance for loan loss methodology and fully fund its allowance for loan loss account.

The order also cited the credit union for its underwriting policies. For example, the credit union needs to develop policies and procedures on the maximum loan amount to collateral value ratio and establish maximum aggregate exposure for each category of high risk loans, as well as maximum limit on each individual loan.

The credit union further needed to improve its loan collection procedures and implement a system to ensure adequate documentation of all contacts with delinquent members.

Maybe NCUA can follow California's example and start to publish enforcement actions in a timely manner.

Read the order.