Poor recordkeeping and unsafe loan practices are among the conditions that officials of Kappa Alpha Psi Federal Credit Union agreed to improve in a letter of understanding and agreement with the NCUA, according to documents released on April 20 by the NCUA.
The letter, which was signed June 30, 2009, stated that the Carrollton, Texas-based credit union hadn't reconciled its books in a timely manner and there isn't enough detail to identify specific information about certain transactions. It also stated that there was inadequate loan documentation and loan limits aren't based on credit risk and income levels. The letter modifies a previous one signed on Aug. 13, 2008.
The changes in its practices that the credit union agreed to include revision of its loan policy to implement risk-based lending, provide transactions to its record-keeping company in a timely manner and establishment of a central repository for all of the credit union's records.
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