Citing a number of violations, the Florida Office of Financial Regulation has issued a cease and desist order against the $1.6 billion Eastern Financial Florida Credit Union for engaging in several "unsafe and unsound" practices.
The March 30 South Florida Business Journal reported that the credit union has 15 practices that it must stop engaging in. Among them, not possessing adequate loan underwriting standards or a loan review program that evaluates risks and carrying an excessive level of concentrations in member business loans.
Other problem areas include not having adequate leadership, not having enough adequate core deposits, and operating without adequate policies to properly fund reserves for future losses of problem loans, the article read.
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The Florida OFR has ordered the CU to submit to a plan to restore its net worth to well-capitalized levels and to address its problem loans and assets.
In a statement to the South Florida Business Journal, the CU said, "We are addressing the concerns quickly and fixing them so we can come out of this recession sooner than other financial institutions. We are very proud of the work that our staff has already done to mitigate the impact of the depressed Florida and United States economy."
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