Kansas Takes Over Small CU, Pending Investigation
The Kansas Department of Credit Unions has assumed control of the 577-member, $1.8 million Enterprise Credit Union in the town of Enterprise pending the results of an investigation.
The credit union’s board voluntarily turned control of the CU over after meeting with the department's director, John Smith, on Monday.
Michael Baugh, the agency's financial exam administrator, said “accounting irregularities” were found during a routine examination last week and that an outside accounting firm now will conduct an independent audit of the CU's books.
Baugh said the department had contacted another CU with the same operating system about running Enterprise CU on a day-to-day basis while the review was being conducted. He said he did not know how long the review would take.
Once the review is finished, Baugh said, it was possible that the CU's Call Reports may have to be amended and that the credit union may have to be liquidated or merged with another.
But he also noted the possibility that the review might simply uncover operational deficiencies which could be corrected, allowing the CU to move forward.
“We just don't know yet,” Baugh said.
Kansas has 80 state-chartered natural person credit unions and one state-chartered corporate credit union.