Alabama CU Regulator Issues Cease and Desist Order to Craig Credit Union "Credit News 24" | Credit News 24

Alabama CU Regulator Issues Cease and Desist Order to Craig Credit Union "Credit News 24"

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Alabama CU Regulator Issues Cease and Desist Order to Craig Credit Union "Credit News 24"

The Alabama Credit Union Administration issued a cease and desist order against Craig Credit Union (Selma, AL).

The cease and desist order found that the $12.8 million credit union and one or more of its institution-affiliated parties have engaged in unsafe or unsound practices, violation of law, rule, and regulations, and have violated the conditions set forth in an April 24, 2018 Letter of Understanding and Agreement (LUA).

Among the items enumerated by the cease and desist order are the following:
  • The board of directors failed to adequately supervise and direct credit union's management.
  • The credit union had inadequate management.
  • The credit union failed to address material deficiencies and comply with terms and conditions specified in the LUA.
  • The credit union operated with a net loss or insufficient income to support net worth growth.
  • The credit union had declining net worth.
  • The credit union had ineffective loan and collection policies and practices.
  • The credit union failed to reduce delinquencies by 25 percent as specified in the LUA.
The order requires the board of directors to improve its oversight of the affairs of the credit union. Also, the board is expected to do its due diligence in identifying a merger partner.

The credit union is expected to retained qualified management.

The enforcement order further mandates a 50 percent reduction in delinquent loans by December 31, 2018 from December 31, 2016 levels.

Read the order.


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