The NCUA’s October cease-and-desist order wasn’t enough to save the tiny Bagumbayan Credit Union in Chicago.
The credit union, which had $55,140 in assets, was placed into conservatorship by the federal regulator, in cooperation with the Illinois Department of Financial and Professional Regulation, on Thursday.
The $626 million Great Lakes Credit Union of North Chicago will maintain service to members through an agreement with the NCUA. During the conservatorship, the NCUA said it will work to resolve issues affecting Bagumbayan’s safety and soundness.
Chartered in 1964, Bagumbayan Credit Union is a federally insured, state-chartered credit union with 44 members. The NCUA’s October cease and desist order addressed internal control issues at the credit union, including Bank Security Act violations, remittance services and the banning of unapproved officials attending board meetings and performing managerial and operational functions.
According to NCUA financial performance reports, Bagumbayan’s net worth slipped below 7% as of September 30, to 6.97%. As of Dec. 31, 2012, net worth was a reported 12.63%, but has steadily dropped each quarter this year. The credit union charged off 46.28% of its loans in the second quarter of 2013 and another 20.98% in the third quarter.
The all-volunteer credit union reported a $8,267 net loss as of Sept. 30.
Bagumbayan Credit Union is the fifth federally insured credit union placed into conservatorship during 2013.