NCUA's Inspector General believes that the $145 million Beehive Credit Union, headquartered in Salt Lake City, Utah, has failed or will fail, but the state regulator disagrees.
In its 2011 Annual Performance Plan, the executive lined out proposed audits for the coming year, including one of Beehive.
"The Federal Credit Union Act requires the OIG to review and report on any credit union material losses exceeding $25 million to the NCUSIF. Beehive Credit Union's loss exceeds this amount," the Inspector General wrote. "We will review Beehive Credit Union to: (1) determine the cause(s) of its failure and the resulting loss to the NCUSIF; and (2) assess NCUA's supervision of the credit union."
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But Paul Allred, Deputy Commissioner for the Utah Department of Financial Institutions, expressed mystification about why NCUA's Inspector General would have included that since the credit union has not been merged, seized or conserved, although he seemed to acknowledge Beehive is struggling, saying at one point that the department is not calling the institution a healthy credit union. "I don't know why NCUA would say that," Allred said. "Perhaps you should ask them?"
NCUA has not yet responded to a request for a comment or clarification of the plan.
As of September 31, NCUA data shows the credit union had a net worth ratio of -0.38% and a a return on average assets of -5.03%.
Beehive gained notoriety in 2007 when it filed an application to convert to a mutual bank charter. But after having won member approval for the change in 2008, the CU backed off its proposal early in 2009.
According to a story in the Salt Lake Tribune, Beehive CEO Scott Jorgensen cited "turmoil" in the economy, and especially the banking arena, as reasons the CU decided a charter change now would not benefit the its members. He also cited "extreme reluctance" among federal regulators to approve the charter change in the current economic and regulatory environment.
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