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.
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