The NCUA and the Massachusetts Division of Banks jointly issued a Letter of Understanding and Agreement to the officials of $178.9 million Tremont Credit Union, Braintree, Mass.
Tremont's board accepted the letter without admitting or denying fault. The LUA required correction of several problems, including insider abuse and self-dealing, poor loan quality, inadequate internal controls and weak management.
The credit union's net worth plummeted from 14.25% to 7.81% over the last year according to its March 2010 financial performance report. At year-end 2009, delinquencies hit 7.81%, but fell back to 4.74% as of March 2010. Return on assets dropped to negative 6.71%, but was positive 0.76 as of the first quarter.
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