The NCUA announced the liquidation of the tiny $55,000 Bagumbayan Credit Union in Chicago on Tuesday evening.

The NCUA, along with the approval of the Illinois Department of Financial and Professional Regulation, made the decision to liquidate Bagumbayan and suspend its operations. The $626 million Great Lakes Credit Union in North Chicago, Ill., immediately assumed Bagumbayan's members and deposits.

Great Lakes Credit Union had been operating Bagumbayan under a management agreement with the NCUA since the federally insured, state-chartered credit union was placed into conservatorship in December of last year.

In October 2013, Bagumbayan consented to a cease-and-desist order from the NCUA that revealed shortcomings in internal controls. The actions required by the order included:

• Cease and desist allowing unapproved officials to attend board meetings, serve on committees, or perform any and all managerial functions, operational functions, or both.
• Refrain from implementing any aspects of a proposed business plan involving the establishment of new lines of business, including money remittance services.
• Resolve all recordkeeping issues and Bank Secrecy Act violations detailed in exam reports.
• Ensure secure storage and transmission of all member data consistent with the NCUA's Rules and Regulations for safeguarding member information.
• Comply with all lawful directives of the state regulator, including all elements of the suspension order issued by that agency.

In 2012, Bagumbayan was issued three suspension orders by the Illinois Department of Financial & Professional Regulation.

Bagumbayan is the first federally insured credit union liquidated in 2014.

Chartered in 1964, Bagumbayan served 44 members and had assets of $55,140 at the time of the liquidation and subsequent purchase by Great Lakes Credit Union.

Bagumbayan's net worth slipped below 7% to 6.97% as of September 30, 2013. As of Dec. 31, 2012, Bagumbayan's net worth was a reported 12.63%, but gradually dropped each quarter of 2013. The credit union charged off 46.28% of its loans in the second quarter of 2013 and another 20.98% in the third quarter.