Arkansas Credit Union Founder Seeks to Fight NCUA Conservatorship

The federal agency said publicly that it conserved People Trust Community Federal Credit Union (PTCFCU) on Jan. 16 because of unsafe and unsound practices. Chartered in September 2022, the credit union opened for business in 2023. 

The NCUA board issued an order of conservatorship and confidential statement of grounds for conservatorship on Jan. 14. 

According to Washington, the confidential statement characterized PTCFCU as undercapitalized and cited unsafe and unsound conditions including declining net worth, recordkeeping concerns, unsound lending practices, inadequate internal controls and BSA violations.  

In his application for relief document, Arlo said he is not seeking to avoid oversight. Instead he is seeking a stay of conservatorship actions pending judicial review of a deficient record, and an opportunity to present evidence that contradicts the factual premises of the conservatorship determination. 

"The conservatorship was imposed without advance notice and without opportunity to be heard," Washington stated. "The administrative record upon which NCUA relied is incomplete and excludes material information regarding vendor failures, examiner conflicts of interest, and governance interference." 

Just six months after PTCFCU received a charter, its Fidelity Information System (FIS) core processor experienced a ransomware incident that caused operational disruption for nearly two months. The core processor also had integrated services with AMI Information Systems and Worldwide Interactive Services (WWIS). 

Throughout 2023 and 2024, the vendor systems continued to fail, according to Washington. 

"The vendor failures prevented reliable reconciliation, created processing delays and errors, and impaired the institution's ability to produce accurate regulatory reports," Washington said. "These were system failures, not management failures." 

FIS sold the platform and without notice ceased servicing PTCFCU. 

Arlo also said PTCFCU was examined by four different NCUA examiners over two years with directives that overlapped or conflicted with prior requirements.  

What's more, Washington accused former NCUA principal examiner Nathan Franklin of a conflict of interest. 

Franklin examined PTCFCU and issued findings that affected the institution's supervisory standing and capital position. Before joining the NCUA, Franklin worked as a consumer loan officer for the $494 million Telcoe Federal Credit Union in Little Rock, Ark., for about two years. In August 2025, after leaving the NCUA, he returned to Telcoe as SVP of lending.  

"Telco Federal Credit Union is a direct market competitor of PTCFCU," Washington said. "Telco publicly opposed PTCFCU's expansion during the period when Mr. Franklin was conducting examinations. Mr. Franklin's return to a competitor institution immediately after issuing examination findings creates an appearance that his examination conduct may have served the competitive interests of his future employer rather than regulatory neutrality." 

In another alleged conflict of interest, Washington noted that another NCUA principal examiner is a sub-agent of the conservator and is married to Eric Mangham, who is EVP of the $2.9 billion Arkansas Federal Credit Union in Little Rock.  

Arkansas FCU is currently serving PTCFCU members during the conservatorship and is positioned to benefit from the conservatorship through member acquisition, operational relationships and market position, Washington argued. 

According to the NCUA's Memorandum and Order for Conservatorship, the June 30, 2025 examination identified unsafe and unsound conditions relating to PTCFCU's management and governance. However, during a meeting with management on Dec. 3, 2025, the NCUA represented that PTCFCU would be afforded adequate time to address the examination findings and submit a revised business plan.

PTCFCU did not receive the formal findings from the June 30, 2025 examination until late October 2025, nearly three months after the examination concluded. 

As regulatory pressure increased, internal governance challenges emerged, Washington said.  

Former PTCFCU Board Chair Michael Pridgeon requested that management retain Ms. Quinn Gibson Lewis as a consultant, representing that she possessed relevant banking policy and procedural expertise. To comply with NCUA guidance and remediate cited deficiencies, management agreed to a limited three-month consulting arrangement.  

Subsequently, management learned that Ms. Lewis was the board chair's significant romantic partner, creating an undisclosed conflict of interest, according to Washington. 

"Management determined that continued engagement was not in the best interests of PTCFCU or consistent with principles of sound governance and regulatory intent," Washington said. "Thereafter, the former board chair and the consultant began interfering in daily operations and attempting to undermine executive authority through improper channels. Management terminated the consulting engagement and took corrective actions to limit further governance and operational risk." 

On Jan. 3, 2026, Pridgeon submitted his resignation to the board and copied the NCUA, asserting false allegations regarding deficiencies in PTCFCU's board governance. 

"Despite NCUA's indication that a January 16, 2026 meeting would address recapitalization and prior board resignations, PTCFCU was instead notified of conservatorship," Washington said. "Management was not afforded an opportunity to reconcile these conflicting submissions, provide context, or address the resignation letter before the NCUA imposed conservatorship." 

Washington is representing himself in this court action. 

READ MORE: Application for Relief from Conservatorship. 

Peter Strozniak can be reached at peter.strozniak@arc-network.com.