Industry experts say due diligence can help credit unions avoid losses like those suffered by the $620 million Alabama One Credit Union in Tuscaloosa, Ala., and the Small Business Administration, which were defrauded of more than $3 million by a businessman.
Losses like the $3 million case involving the SBA and Alabama One can be avoided, experts say.
The SBA and the $620 million Alabama One Credit Union were among the victims of check kiting and other fraudulent activities allegedly committed by Danny Ray Butler, a businessman and real estate developer.
Businessman also charged in $1.76 million hit against SBA for grocery store loan.
Auto lending has traditionally been the backbone of many credit union lending operations. Some lenders have recently benefited from the Cash for Clunkers program and from the rebound in auto sales since the recession.
When a credit union makes the announcement that it is planning to convert to a bank, it almost always throws the industry into a tizzy.
Credit unions have a large stake in the debate over how to reform the secondary mortgage market but may need exceptional patience and endurance to see it through to the end.