A search is underway for a new director, she said.

Morgan assumed the state regulator post in 2011 after retiring as CEO of the $2.2 billion APCO Employees Credit Union in Birmingham. He was also chairman of the board for the $3.7 billion Corporate America Credit Union.

The ACUA continued its investigation at the $608 million Alabama One, which is facing civil lawsuits from several members who allege the credit union and some of its employees concocted a straw loan scheme that defrauded members and benefited Tuscaloosa used car dealer Danny Ray Butler, according to court documents.

Before resigning from the ACUA, Morgan lifted regulatory suspensions and all restrictions against four Alabama One employees: CEO John Dee Carruth, Chief Operating Officer Martie Patton, Business Lending Manager Tammy Ewing and Teller Celina Hood. The ACUA had suspended the four employees Feb. 28.

Alabama One said in a Tuesday release Morgan was manipulated by trial lawyers, including Justice “Jay” Smyth of Tuscaloosa, who represents several Alabama One members who are suing the credit union.

Morgan declined to comment on whether he was influenced by Smyth or other lawyers involved in the cases.

Vic Haslip, a Birmingham attorney representing Alabama One, said the suspensions were part of an orchestrated attack on the credit union.

“The truth is that Mr. Morgan led the team that suspended AOCU's four long time and trusted employees without basis,” Haslip said. “While these employees were suspended and, later, placed on administrative leave, the ACUA conducted an investigation to determine the facts behind the allegations the regulatory agency had received from a group of trial lawyers and others who stood to gain from attacks on the credit union.”

“Late last week, following their investigation, the ACUA fully reinstated the four AOCU employees without condition or restriction,” Haslip continued. “Within one business day of their full reinstatement, Mr. Morgan abruptly tendered his resignation from the ACUA. No one knowing these facts could rationally believe that any regulator, after such a thorough investigation, would have reinstated these employees had the plaintiffs' lawyers' allegations had any truth to them. There are no issues that need to be addressed by a new director of the ACUA.”

In an interview Tuesday with CU Times, Smyth denied Alabama One's claims that he manipulated state regulators.

“We have no way of knowing the facts upon which the suspensions were originally based, or the facts upon which reinstatements were supposedly based,” Smyth said. “Any suggestion otherwise is simply a fabrication.

“The only way we learned about the presence of regulators the following day was because someone called us and reported that 'people in dark suits, along with Alabama State Troopers,' had been seen entering the front doors at Alabama One,” Smyth said.

Smyth said his clients are concerned that Alabama One members were reportedly prevented from asking questions during the credit union's annual meeting on March 22, which was overseen by Carruth.

“Following a motion made by a member of one of the law firms representing Alabama One, the traditional Q&A segment was removed from the agenda without advance notice to the members,” Smyth said in a written statement to CU Times.

The credit union denied any wrongdoing.

*The annual meeting was adjourned upon motion by a member that carried by majority vote of those members in attendance,” Haslip said. “Apparently Mr. Smyth is suggesting that the entire membership in attendance at the credit union was in cahoots to deny members an opportunity to be heard. This is simply not the case.”