Up against a series of fast-approaching deadlines, Eastern Financial Florida Credit Union is working to comply with a cease and desist order of unsound and unsafe practices, said the Florida Office of Financial Regulation.
After reviewing findings from an Oct. 6, 2008 report of examination, the OFR concluded that the $1.6 billion CU was engaging in 15 unsound and unsafe practices including violations of laws related to its operation. A March 19 OFR cease and desist order said the CU must stop engaging in a number of practices including operating without "effective leadership" and operating with inadequate polices procedures and internal routines and controls regarding capital liquidity earnings and lending.
"They are working to comply with the provisions of the order," said Robert Hayes, bureau chief at the Florida Office of Credit Union Regulation. "Management is making every effort to comply."
According to the order, Eastern has a series of deadlines to meet over the next 45 to 60 days. Effective immediately, the board and management has to show that the CU has adequate liquid funds at all times to meet its obligations as they become due. The CU was also ordered to submit a written plan to improve earnings by today.
Hayes did not want to speculate on what would happen if Eastern Financial did not comply with the order's deadlines.
"In dealing with speculative things, I would rather not comment. There are so many factors that could come into play. Let's see how things unfold," Hayes said.
Eastern Financial has not responded to a request for comment. However, in a statement to the South Florida Business Journal it said it is "addressing the concerns quickly and fixing them."