Thursday, September 20, 2012

Illinois CU Fined for Improper Loan

Moline-based DHCU Community Credit Union was fined $10,000 by the Illinois Department of Financial and Professional Regulations for making an improper unsecured loan to a member of its executive management team.

On September 21, 2011, the credit union made an unsecured loan for $350,000 to a member of its executive management staff.

However, the maximum unsecured loan limit for a credit union under Illinois administrative rules is $40,000.

During an examination in March, the improper loan was identified. The state credit union regulator gave the credit union until May 31, 2012 to divest the loan.

The credit union asked for an extension to June 30, 2012 and the extension was granted.

A follow up examination to see if the loan had been divested found that only a portion of the improper loan had been divested and the remaining balance ($85,000) had been reclassified as "Other Assets."

The credit union failed to remedy the violation and was fined $10,000.

Read the civil penalty order.

1 comment:

  1. How do you say INSIDER DEALING? I am sure the interest rate had to be below market rate, too. And the loan officer received a filthy stinking bonus for hitting the loan lending goal for the month, too. So everyone got juiced. Do they make these $350,000 unsecured loans to the general membership?



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