Vensure FCU: Poker Patsy or Plotter?
The closing of a small, single-sponsor federal credit union in Arizona has raised serious questions about some of the ways NCUA supervised or failed to supervise a federally chartered CU.
When it was first announced, the decision to close the $2.7 million Vensure Federal Credit Union, headquartered in Mesa, Ariz., did not appear justified. While there was no data available from the March Call Report, the agency's announcement set the CU's assets at $4.7 million and membership at 144, but the agency's data site reported its assets as of Dec. 31, 2010 to be $2.7 million and 94 members.
Gambling on the Internet has long been illegal in the U.S., but it was a ban without many teeth until 2006 when Congress passed the Unlawful Internet Gambling Enforcement Act, which made it illegal for companies to accept payments for gambling over the Internet. The passage of the UIGEA led most of the existing Internet banking firms to leave the U.S. market, but the three under indictment, among others, remained, according to the government's indictment. The companies were charged with using fraud to try to circumvent UIGEA.
Federal officials declined to comment on the indictment or Vensure's role in the scheme, citing ongoing investigations, but the credit union only had one account, in the name of the Trinity Global Commerce Corp., seized by the government. But the fact that the NCUA conserved the CU after the seizure argued that it was an account of significant size and that the agency might have closed Vensure because the CU could not remain liquid after the account was seized, one attorney who did not want to speak for attribution observed.
Finally, there are indications that the CU's charter might have been hijacked. Vensure FCU had been chartered in 1995 as the Greater Adirondack Federal Credit Union in New York to serve the members of a fraternal lodge that Todd Harper, NCUA's Director of Public and Congressional Affairs, said had gone out of existence.
"As the field of membership shrank, the credit union, in essence, risked becoming defunct. Consistent with NCUA’s policies, the board of directors of Grand Adirondack then applied for and received a new field of membership to serve the members of Vensure Employer Services in Mesa, Ariz., and the company’s subsidiaries," Harper explained. It was unclear what relationship, if any, existed between the credit union's board and Vensure Employment Services.