ALEXANDRIA, Va.-NCUA has placed College Heights Credit Union of Fayetteville, N.C., into conservatorship due to its poor financial condition. The key factor in NCUA conserving the credit union was that its net worth fell below 2%, according to the NCUA chairman's Special Assistant for Public Affairs Nick Owens, though he would not say just where the net worth is. As of June 2003, the credit union had a net worth ratio of 2.17%, according to NCUA data. NCUA is statutorily required to take prompt corrective action if a federally insured credit union's net worth falls below specified capital levels and the institution does not establish an acceptable plan to fix the problem. College Heights' did not come forward with an acceptable plan, Owens said. According to NCUA Public Affairs Specialist Cherie Umbel, College Heights was previously conserved in the early 1990s. For a credit union to be placed into conservatorship twice is rare but not unheard of, she said. Owens added, "This credit union was chartered in 1947, and NCUA believes that the best option is conserving the credit union in hopes of saving the institution." North Carolina Minority Support Center (NCMSC) Vice President Tanya Branch said that NCUA has also assured her organization, which works very closely with the credit union, that it is working to return it to the membership. She explained that it is the only community development credit union in the area and primarily serves the African-American and military communities. College Heights provided members with an alternative to payday loans, wire services, and real estate loans, as well as share drafts, CDs, and other products and services. Lenwood Long, an NCMSC community development specialist, has been retained by NCUA as general manager through the conservatorship, according to Branch. NCMSC is similar to the National Federation of Community Development Credit Unions, but only works within the state. While NCUA does not judge a credit union's stability based on its peers' performance, College Heights' peer average was at 13.50% at mid-year. The credit union's delinquencies to total loans was 13.00%, much higher than its peers' 2.05%. Its return on assets was at 0.22%, below its peers' 0.55%. College Heights is a federally insured state chartered credit union and members' funds in it are backed by the "full faith and credit of the U.S. government," NCUA emphasized. The agency hopes to return the credit union to the control of its members once it achieves a strong financial position. Service has continued uninterrupted for the credit unions' nearly 2,000 members. The Federal Credit Union Act provides the NCUA Board with the authority to appoint itself as conservator to conserve the assets of a federally insured credit union, protect members' interests, or protect the National Credit Union Share Insurance Fund. [email protected]