SALT LAKE CITY - Mountain America Federal Credit won more field of membership authority than it expected when it agreed to acquire the troubled $20 million Utah Copper Employees CU of Copperton in a supervisory merger. Under a NCUA takeover deal, Mountain America, which converted to a federal charter last...
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SALT LAKE CITY – Mountain America Federal Credit won more field of membership authority than it expected when it agreed to acquire the troubled $20 million Utah Copper Employees CU of Copperton in a supervisory merger. Under a NCUA takeover deal, Mountain America, which converted to a federal charter last May with SEG-only powers, was authorized to sign up residents of Salt Lake County where Mountain America is headquartered. In merging Utah Copper which was hit earlier this year by an alleged employee embezzlement, Mountain America said it will solicit Salt Lake residents. But the $1 billion credit union has no intention of veering from its corporate goal of signing up SEGs throughout its branch network which also includes facilities in New Mexico, Nevada and Arizona. The Copperton-based credit union with 1,900 members has been the subject of an FBI investigation for months following “fictitious loans totaling more than $1 million” allegedly put on the books by a former CU manager, said Orla Beth Peck, state CU supervisor in the Utah Department of Financial Institutions. Auditors uncovered the fraud in March and alerted enforcement and bonding agencies, as well as NCUA, she said. The Utah Copper board voted to seek a merger after the fraud was discovered, said Peck. NCUA began the formal bidding process “about a month ago when we were invited in,” said Fred Nydegger, senior vice president of industry and member development for Mountain America. Nydegger said he doubted the Utah Copper merger would figure in the American Bankers Association/Utah Bankers Association’s pending federal suit here challenging NCUA’s FOM policies “since it involves only one county.” The ABA seeking to overturn three NCUA approvals for FOM expansion in Utah, charges the federal agency has overstepped its authority by letting CUs expand beyond “well-defined local communities.” Copperton is located 22 miles southwest of downtown Salt Lake. But Nydegger may have spoken too soon. On Aug. 20, Utah Bankers Association President Howard Headlee told the Deseret News that NCUA’s approval of Mountain America’s merger with Utah Copper CU may be challenged in court by the UBA. Nydegger said UBA attorneys are “researching” the legality of the NCUA’s approval since Mountain America in its federal charter was limited to SEG expansion alone. Meanwhile, on Aug. 20 Headlee and Scott Earl, the president of the Utah League of Credit Unions, went on the air to debate the issue in a morning talk show on KSL Radio. Regarding the merger, Nydegger said Mountain America is sticking to its SEG-only expansion under its federal charter received May 1 “and that is working well for us,” said Nydegger. -
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