Citing weak management, weak internal controls and ledger imbalances, the NCUA issued a Letter of Understanding and Agreement to the Veritas Federal Credit Union, the agency announced.
The NCUA, which issued the LUA on June 23 and announced it today, requires the credit union to make several changes, including: Begin foreclosure actions within 90 days of loans becoming delinquent; implement a vendor management program; conduct more audits, hire an outside party to reconcile its settlement with WesCorp and its ATM accounts, and establish stronger internal control policies;.
The agency said the credit union hadn't had a supervisory audit or complete member account verification since 2008.
The NCUA also said the credit union had an inadequate allowance for loan and lease loss account balance.
The LUA noted that the credit union, which is located in Franklin, Tenn. and has assets of $33 million, didn't address issues raised in a previous LUA and Document of Resolution.
The credit union's loan income declined 1.7% during the second quarter of 2010.
Its net worth ratio was 7.88% during the second quarter of 2010, compared with 7.58% in the first quarter and 7.44% at the end of 2009.
Its return on average assets ratio was -0.17% at the end of the second quarter, -0.70% after the first quarter and -3.13% at the end of the fourth quarter of 2009.
The credit union's delinquent loan ratio was 5.31% as of June 30, 4.58% as of March 31, and 4.67% as of last Dec. 31.
