The NCUA, which over the weekend added Arizona's AEA Federal Credit Union to its growing roster of conserved CUs, reaffirmed Tuesday its policy of resolving CU failures "on a case by case basis" choosing among liquidation, merger or ongoing preservation.

"NCUA always considers the best interests of members and preservation of their assets as well as cost to the NCUSIF when making a determination," explained John McKechnie, director of Congressional and public affairs.

The $309 million AEA of Yuma had been on the NCUA's watch list for months after it endured large real estate losses with net worth ratio falling from 8.22% to 2%. On Friday NCUA anointed Thomas Martin, a former CEO of now merged Continental FCU of Tempe, Ariz., as conservatorship CEO. Continental earlier this year was merged into Alliant CU of Chicago.

Regarding Martin's selection, NCUA noted he has spent the past 15 years in credit unions, most recently as CEO of Continental FCU in Tempe and CFO of Arizona Central CU in Phoenix.

As AEA CEO, Martin replaces interim CEO Denise Sweet-McGregor, who during the year was frequently candid about the CU's troubles, citing the depressed Yuma economy as a major factor in the CU's financial plight. However, two weeks ago the CU revealed its serious problems on business loans in line with a Phoenix grand jury indictment of AEA's former vice president of business lending, Bill Liddle, charged in a kickback scheme with local businessmen. A trial is set for February.

The CU was also reportedly on the hook in connection with a $1.5 million loan to a now boarded up historic hotel, Yuma's Richard Lee listed on a national registry of historic places and named after Confederate general Robert E. Lee.

As to NCUA policies, McKechnie noted that in the case of last week's failed $145 million Beehive CU in Salt Lake City, the agency chose a purchase/assumption merger with Security Service FCU of San Antonio.

"The state of Utah took action to liquidate Beehive, and NCUA executed the Purchase and Assumption," he said. "Decisions about conservatorship versus liquidation or merger are matters of policy determined on a case-by-case basis by the NCUA Board."