The order, which was issued on April 2, found that Institution-Affiliated Parties at $602 million Alabama One Credit Union had engaged in unsafe and unsound practices.
The enforcement order found that the Board of Directors had failed to provide adequate supervision over and direction to the management of the credit union.
In addition, the credit union operated with inadequate management.
The enforcement order also stated that the credit union operated without proper expertise, policies and procedures with regard to its Member Business Loan (MBL) portfolio.
Furthermore, the credit union had unsafe and unsound loan underwriting and administration practices.
The state regulator found that the credit union granted, renewed, and extended loans to members disguised as straw borrowers. The credit union also modified, extended, deferred, and renewed business loans to a borrower who did not have ability to meet the terms of the loan.
Within sixty days of the order becoming effective, the credit union is to retain qualified management, including CEO, COO, and senior lending officer.
The credit union is required to charge-off those loans classified as a loss. Also, the credit union will cease offering, granting, and issuing MBLs.
Read the Order.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment