NCUA and Kappa Alpha Psi FCU Sign Letter of Understanding and Agreement
Poor recordkeeping and unsafe loan practices are among the conditions that officials of Kappa Alpha Psi Federal Credit Union agreed on in a letter of understanding and agreement with the NCUA to improve, according to documents released today by the NCUA.
The letter, which was signed last June 30, stated that the Carrollton, Texas-based credit union hadn't reconciled its books in a timely manner and there isn't enough detail to identify specific information about certain transactions. It also stated that there was inadequate loan documentation and loan limits aren't based on credit risk and income levels. The June 30, 2009 letter modifies a previous one signed Aug. 13, 2008.
The NCUA didn't explain why it is releasing the document now and the credit union's chairman didn't return a phone call seeking comment.
According to the credit union's latest financial report filed with the NCUA, which contained data as of Dec. 31, 2009, it had $764,309 in assets, a 12.2% decline from the previous quarter. The value of its investments declined 93.2% during the fourth quarter of last year.
Its delinquent loan ratio was 9.68% and its net worth ratio was 1.48%.Its return on average assets was 0.07%.
The credit union, which has no full-time employees, has 1,360 members.