In a consent order, the NCUA last week barred Richard Koenig,the former chairman of Central States Mortgage Corp., a bankruptMilwaukee CUSO and ex-CEO of the $144 million Prime Financial CU ofCudahy, Wis., from further industry activities.

Terms of the directive were not disclosed, but the disbarmentstems from the March 2009 state conservatorship of Prime Financial,which numbered among nearly two dozen small Wisconsin and IllinoisCUs that suffered mortgage loan losses in the 2009 collapse ofCSMC, one of the early CU victims of the economic recession.

CSMC had been chartered with leadership help of the WisconsinCredit Union League, also one of the investors. The CSMC failurecame as the real estate market turned sour in 2008-2009 with morethan half a dozen small Milwaukee area CUs experiencing largelosses and writing down their CSMC investments. Eventually a numberwere absorbed in mergers with healthier CUs.

The NCUA order said Koenig was being disbarred “withoutadmitting or denying fault.” The NCUA said its action falls under a“signed order of prohibition to avoid the time and cost ofadministrative litigation.”

Following a turnaround by Prime Financial, the Wisconsin Officeof Credit Unions in May lifted the conservatorship on the Cudahy CUafter it posted a $270,000 profit in the first quarter anddemonstrated financial capacity to grow, said regulators.

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