Kappa Alpha Psi FCU Declines to Go Quietly, Brings Suit Against the NCUA
Kappa Alpha Psi Federal Credit Union, a predominantly African-American community development credit union headquartered in Addison, Texas, is fighting an NCUA liquidation order in court.
The agency issued its order liquidating the credit union on Aug. 3, claiming the CU is "minimally capitalized" and adding "there are no reasonable prospects for the credit union to achieve adequate capitalization."
In an Aug. 4 letter to the credit union's 1,341 members on its website, Victor Russell, chairman, took pains to rebut what the NCUA said in its liquidation order.
Where the NCUA claimed KAPFCU was minimally capitalized, the credit union claimed that it had steadily improved its capital position to 3.67%. Where the agency complained the CU did not conform to traditional models for cash accrual, the credit union said the NCUA had never really accepted the CU's organizational model.
The credit union is working toward a merger with the $129 million Hope Community Credit Union, but the details have not been finalized.
Bill Bynum, CEO of Hope Community confirmed that Hope Community is ready to take on the members and accounts of Kappa Alpha Psi in a merger, so long as the fraternity also becomes a sponsor of his credit union.