Melrose is the industry's largest lender of taxi medallions that have substantially declined in monetary value because of fierce competition from mobile phone app-based transportation providers such as Uber and Lyft. As a result, Melrose has lost hundreds of millions since 2016.

The NCUA, which placed the Briarwood, N.Y.-based credit union into conservatorship in February 2017, accused the former CEO of accepting luxury trips from Melrose vendors, living in a rent-free home from a vendor, misleading the Melrose board about a $2 million naming rights agreement, using credit union funds that paid for non-business limousine trips for Kaufman and his family,  maintaining a contract that improperly used Melrose's funds to pay for his father and stepmother's airfare, hotels and meals, and converting the credit union's resources for Kaufman's personal gains.

The NCUA issued late Tuesday a rarely used authority to seek a prohibition order against Kaufman and is requesting that he be ordered to pay restitution of at least $3.5 million and a civil penalty of at least $1 million.

For decades, the Kaufman name was synonymous with Melrose. Alan Kaufman's grandfather helped found the credit union in 1922 and served as its CEO, as did Kaufman's father.

Alan Kaufman joined Melrose in 1984 and became CEO, treasurer and a member of the board in 1998. In July 2016, he was removed for cause by the Melrose board, according to the NCUA.

An evidentiary hearing is scheduled for Sept. 28 before an administrative law judge.

Within 20 days, however, the former executive must file his answers to the charges by either admitting to or denying them. He also can file an answer by stating there is a lack of sufficient information to admit or deny the charges, according to the NCUA.

If he fails to file his answers with the NCUA and the Office of Financial Institution Adjudication, Kaufman will be deemed to have waived his right to appear and to contest the allegations at the evidentiary hearing.