Amended Complaint Seeks Documents Tied to NCUA's Decision to Conserve Arkansas Credit Union

However, on Dec. 21, a meeting of the board of directors occurred but Washington said he was not notified and did not attend the meeting.
As a result, no official management record of the meeting was created through the credit union's normal governance procedures.

Washington alleged that then-Board Chair Michael Pridgeon submitted a request to the NCUA seeking an additional extension regarding the revised business plan. The former CEO argued that regulatory communication with the NCUA was historically handled through executive management and that this request was submitted outside the established management communications process.

Nevertheless, the NCUA granted the extension request, according to the amended complaint. Less than one month after submitting the revised business plan, the federal agency placed People Trust Community into conservatorship on Jan. 16.

Washington contended that the timing of these events raises questions regarding whether the revised business plan was fully evaluated before the conservatorship was imposed. He argued that if the NCUA's decision relied on communications submitted outside the established management communication process, it undermined the regulatory review process and is subject to judicial review.

The NCUA declined to comment when reached on Wednesday.

Washington filed his first complaint – an application of relief from conservatorship – on Jan. 23 in U.S. District Court in Little Rock, Ark., which made serious assertions of vendor system failures, NCUA examiner conflicts of interest and supervision inconsistencies, federal ethics violations, the undermining of Washington's executive authority and other issues. 

In February, the NCUA filed its motion to dismiss Washington's legal action arguing that only the credit union itself – through a valid board of directors resolution – can challenge an NCUA action.

"Since Washington filed his application as a member of the credit union but not as the credit union itself, he lacks standing to apply for relief … and his application must be dismissed for lack of subject matter jurisdiction," the NCUA stated.

The federal agency also said Washington's application supports the order of conservatorship because it noted People Trust Community's net worth ratio declined from 7.06% as of June 30, 2025 to 3.12% by Aug. 31, 2025.

"Based on this rapidly declining net worth, exacerbated by unrecognized costs and liabilities and significant Truth in Lending Act violations, the NCUA issued the order of conservatorship to conserve PTCFCU assets, protect the interest of its members and to protect the National Credit Union Share Insurance Fund," the federal agency stated. "A statutory ground existed for the NCUA's order of conservatorship, and the NCUA did not act arbitrarily or capriciously, so there is no basis to enjoin the conservatorship."

At the end of last year, People Trust Community posted a loss of $927,691 and a net worth ratio of -20.90% compared to a loss of $108,879 in 2024 and a net worth ratio of 7.75%, according to NCUA financial performance reports. In 2023, People Trust Community recorded a loss of $47,571.

People Trust Community's fourth quarter Call Report showed a provision for loan loss of $247,057, while its non-interest income totaled $264,861 and net interest income $71,897.

The credit union also recorded a $1,017,392 loss in non-interest expense, which included office operations expenses of $794,693, employee compensation and benefits expenses of $69,744, office occupancy expenses of $27,077, professional and outside services expenses of $62,642, and miscellaneous non-interest expenses of $22,804, according to the credit union's Call Report.

READ MORE: Arlo Washington's Amended Complaint.

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