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ALEXANDRIA, Va.-The former management of a small credit union recently conserved by NCUA is fighting to take back control of the institution. Dallas Educators Federal Credit Union (Selma, Ala.) was placed into conservatorship April 19 based on significant record-keeping issues and the financial condition of the credit union. The NCUA Board appointed Region III Director Alonzo Swann conservator. The board voted to conserve the credit union at its April 15 closed board meeting, according to NCUA Director of Public and Congressional Affairs Cliff Northup. “The agency lost confidence – in large part because the bookkeeping had been so bad – that this could be worked out smoothly,” he explained. Northup added that there were major discrepancies between NCUA’s information on the credit union and the credit union’s records. In particular, delinquencies were not addressed or accounted for correctly, he said. When those figures were corrected, Northup said, the $480,000 credit union was critically undercapitalized for Prompt Corrective Action standards. NCUA’s primary responsibility is to protect the funds, he explained, but the Federal Bureau of Investigations is looking into whether the problems were the result of criminal activity or not. A conservatorship transfers management of a credit union to NCUA with the goal of restoring a safe and sound financial institution to the control of its membership. Service to Dallas Educators’ 323 members has continued uninterrupted. However, according to an article in the Selma Times-Journal, Dallas Educators’ former Manager and Treasurer Ollis Grayson Jr., claims NCUA is partly to blame for the credit union’s low capitalization. The article quoted Grayson as saying NCUA imposed “unreasonable requirements” on the institution and mandated that it write off a significant amount of loans that management insisted could still be collected. “As a result of this charge-off, the credit union was required to fund its loan loss account by over $135,000 and it did so, at the expense of then being determined by the National Credit Union Administration of being undercapitalized,” Grayson said in the Selma Times-Journal. He stated that the credit union was managed in an honest manner. At the end of the press conference, Grayson declined to take any questions from reporters, the article said. Dallas Educators Federal Credit Union was chartered in 1961 to serve the employees of the Dallas County Board of Education who work in Dallas County, Ala., employees of the credit union and members of their immediate families. [email protected]

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