NCUA took over a community development credit union serving one of the lowest income communities in the nation last Friday.
In its Oct. 23 announcement, the agency said its goal in taking over the management of the $5.4 million First Delta Federal Credit Union, headquartered in Marks, Miss. was to "continue credit union service to its members and ensure safe and sound credit union operations."
First Delta had been the victim of a nine year embezzlement by one of its loan officers that ultimately resulted in a loss of roughly $1 million. The credit union additionally suffered, according to former executive Robert Jackson, from an agency reluctance to allow some of its secondary capital deposits to be used in its capital ratio. According to the CU's June call report, the credit union's capital ratio stood at 1.06%.
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The NCUA's action drew comment from the National Federation of Community Development Credit Unions where Jackson is still listed as a board member.
"We strongly encourage NCUA to employ every financial, technical, and human resource at its disposal to maintain financial services to the people of the Delta," said Federation CEO Clifford Rosenthal. "To leave that predominantly African-American community at the mercy of predatory lenders and the banks which have historically neglected it would be tragic, not only for the people of Mississippi but for the entire credit union movement, and the Federation is committed to working with NCUA to ensure this does not happen."
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