Credit union placed in conservatorship
The National Credit Union Administration on Friday assumed control of operations at AEA Federal Credit Union, but service to the credit union's 49,130 members will continue uninterrupted, according to a news release issued late that day.
NCUA said its goal is to continue credit union service to the members and ensure safe and sound credit union operations.
Member deposits are safe. Their accounts are insured up to $250,000 by the National Credit Union Share Insurance Fund (NCUSIF), a federal fund managed by NCUA and backed by the full faith and credit of the U.S. government.
AEA members can continue to conduct normal financial transactions – deposit and access funds, make loan payments and use share drafts, the news release stated. The credit union, which has assets of $309 million, provides a full range of financial service to people residing in Yuma and La Paz counties.
AEA Federal Credit Union was placed into conservatorship due to declining financial condition, according to the news release. The credit union is not adequately capitalized under standards set forth in the Federal Credit Act and has earnings insufficient to enable it to continue under present management.
The credit union has been struggling for some time due to difficulties stemming from problems in its commercial loan portfolio and over the past several months had undertaken a variety of cost-cutting measures.
Recently, a grand jury handed down numerous indictments against Bill Liddle, who formerly managed AEA's business loan department, his wife and local businessman Frank Ruiz in an alleged kickback scheme related to loans made to Ruiz.
The decision to conserve a credit union enables the institution to continue normal operations with expert management in place correcting previous service and operational weaknesses.
The Federal Credit Union Act authorizes the NCUA Board to appoint itself conservator when necessary to conserve the assets of a federally insured credit union and protect members' interests or protect the NCUSIF.
The NCUA is the independent federal agency that charters and supervises federal credit unions.