NCUA Places AEA FCU into Conservatorship
On Dec. 17, the NCUA assumed control of operations at AEA Federal Credit Union of Yuma, Ariz.
Service to AEA's 49,130 members continues uninterrupted and member accounts are insured up to $250,000.
AEA Federal Credit Union was placed into conservatorship due to declining financial condition.
The credit union shrank from $393 million in assets as of September 2009 to $309 million at the time of conservatorship. AEA FCU's vice president of business lending was recently alleged to have been taking kickbacks on questionable business loans. Its net worth ratio fell from 8.22% to 2.00%. The credit union is not adequately capitalized under standards set forth in the Federal Credit Union Act.
The credit union's difficulties stemmed from problems in its loan portfolio, from mortgages to indirect loans. Loan delinquencies were at 19.12%.
Conserving the credit union enables the institution to continue normal operations with expert management in place correcting previous service and operational weaknesses.