Alabama's top credit union regulator, now facing an unusual court challenge of a conservatorship, accused the former management of the failed $193 million Mutual Savings Credit Union of Birmingham of misrepresenting loan loss and other data in the Alabama Credit Union Administration's July 31 seizure.
"That credit union was simply badly run and their CEO and board had posted totally inaccurate records on the books from their 5300 report," declared T. Glenn Latham, Alabama Credit Union Administrator in defending the department's takeover of Mutual, headed by Dale Dalbey, former treasurer of the newly-formed League of Southeastern Credit Unions.
Latham's claims, which also charge Mutual management with excess spending, are now included in proceedings in a state court suit filed last month brought by Dalbey and members of the Mutual board seeking to enjoin the conservatorship. The Shelby County Circuit Court in Columbiana has set Oct. 26 for the first hearing on the case.
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In countering Latham's charges, attorneys for Dalbey, Mutual's chairman, Barbara R. Luckett and other directors argued Latham is distorting the facts on Mutual's true financial condition at the time of the state takeover.
On financial data, Latham maintained the CU's capital ratio was 6 % but its reporting showed 8.1%, adding also the CU had engaged in poor loan practices taking on "some bad commercial loans."
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