The NCUA today issued a Letter of Understanding and Agreement with the officials of $360 million Sperry Associates Federal Credit Union of Garden City Park, New York.
The LUA cited the credit unions for declining capital, participation losses, potential unrecognized investment losses, inadequate due diligence, and inadequate testing of high-risk areas. The credit unions' capital declined from 6.22% in March 2009 to 5.15% March 2008, according to the financial performance report filed with the NCUA. The credit union also had more than $27 million in participation loans outstanding, mostly business loans. Participations accounted for over 11% of Sperry Associates' entire loan portfolio.
The credit union is open for business for its approximately 8,000 members and deposits are federally insured up to $250,000 per account by the NCUSIF.
NCUA enforcement orders are online at: http://www.ncua.gov/Resources/AdministrativeOrders/LUA.aspx. Violations of LUAs could result in civil money penalties, cease and desist orders, removal and prohibition orders, or orders to liquidate, conserve or merge the credit union.
