Tuesday, May 30, 2017

MADCO Credit Union Operations Suspended for 60 Days

The Illinois Director of the Division of Financial Institutions issued an order suspending the operations of MADCO Credit Union (Edwardsville, IL) for 60 days and appointed 1st Mid-American Credit Union (Bethalto, IL) as Manager-Trustee.

The order was signed on May 23.

The Illinois regulator determined that MADCO Credit Union was in danger of insolvency as the true financial condition of the credit union could not be ascertained during an examination.

According to the order, the credit union was delinquent in paying Illinois withholding taxes and federal payroll taxes.

Also, the credit union is required to hold its annual meeting in the first 3 months of the year; but as of the signing of the order, the credit union had not held its 2017 annual meeting.

The credit union was not in compliance with state law on the number of directors, as it only had 4 board members. In addition, the credit union lacked a quorum, as its bylaws required 9 board members.

The credit union board declared a dividend although the board lacked a legal quorum to do so.

In addition, the order states that the credit union had loans that were either non-performing or showed no signs of being collected.

The order further noted that the loans to directors, officers, loan committee members, and supervisory committee members were not in compliance with Section 52 of the Illinois Credit Union Act.

Moreover, the order cited the credit union for its weak internal controls.

MADCO Credit Union had almost $1.7 million in assets, as of the most recent Call Report.

Read the order.

No comments:

Post a Comment


The content is provided for educational purposes only, with the understanding that neither the authors, contributors, nor the publishers of this site are engaged in rendering legal, accounting or other expert or professional services. If legal or other expert assistance is required, the services of a competent professional should be sought.

Comments appearing in response to articles appearing on this site do not necessarily reflect the views of the ABA. ABA makes no representations regarding the truth or accuracy of commentary or opinions that may be posted in response to the articles that appear on this website.

The inclusion herein of any link to a website, either in the text of an article or in a comment, does not denote any approval, sponsorship, or endorsement by the ABA, and ABA is not responsible for the content or opinions expressed on those linked websites or related commentary. This content is not licensed to third parties sites and is not affiliated with any third party site. Any reference to the author or this content on any third party site on the Internet is not authorized by the ABA.

It is the policy of the American Bankers Association to comply fully with all antitrust laws. Certain discussions should be considered off-limits, including those that contain competitively sensitive data such as price and cost information, or statements that could be construed as reflecting an attempt or desire to control or influence a particular market or markets. Future pricing or other prospective competitive information should never be shared.