Contrary to allegations made by former Alabama One Credit Union member Danny Ray Butler, employees of the $602 million, Tuscaloosa, Ala.-based cooperative had no knowledge of his check kiting scheme that took place in 2011 and 2012, John Dee Carruth, president/CEO for Alabama One, told CU Times.

Carruth also asserted that the credit union kept a close eye on the business loans it made to Butler and the amounts of which exceeded a regulatory cap. Instead, he attributed the violation to unclear loan aggregation rules.

According to a federal lawsuit filed June 29 by Alabama One and Carruth, which alleged a conspiracy orchestrated by state officials and local attorneys who pressured the credit union to settle several frivolous civil lawsuits, the credit union's loans to Butler inadvertently exceeded the regulatory cap on a percentage of MBL loans that can be made to a single member. This occurred as a result of varying opinions from regulators in regard to loan aggregation, Carruth said.

Complete your profile to continue reading and get FREE access to, part of your ALM digital membership.

  • Critical information including comprehensive product and service provider listings via the Marketplace Directory, CU Careers, resources from industry leaders, webcasts, and breaking news, analysis and more with our informative Newsletters.
  • Exclusive discounts on ALM and CU Times events.
  • Access to other award-winning ALM websites including and

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

Natasha Chilingerian

Natasha Chilingerian has been immersed in the credit union industry for over a decade. She first joined CU Times in 2011 as a freelance writer, and following a two-year hiatus from 2013-2015, during which time she served as a communications specialist for Xceed Financial Credit Union (now Kinecta Federal Credit Union), she re-joined the CU Times team full-time as managing editor. She was promoted to executive editor in 2019. In the earlier days of her career, Chilingerian focused on news and lifestyle journalism, serving as a writer and editor for numerous regional publications in Oregon, Louisiana, South Carolina and the San Francisco Bay Area. In addition, she holds experience in marketing copywriting for companies in the finance and technology space. At CU Times, she covers People and Community news, cybersecurity, fintech partnerships, marketing, workplace culture, leadership, DEI, branch strategies, digital banking and more. She currently works remotely and splits her time between Southern California and Portland, Ore.