Concerns about the financial viability of Oshkosh Central Credit Union and the revelation that more than $1.7 million was missing from its vault, Wisconsin regulators approved July 30 the merger of the Oshkosh-based $28.2 million credit union with the $2 billion Community One Credit Union in Appleton, Wis.
Pending final approval from NCUA, the merger is expected to take effect Sept. 1.
In early May, the Wisconsin's Department of Financial Institutions said it was investigating alleged substantial irregularities at the 3,432-member Oshkosh Central, which prompted the suspension of its longtime president/CEO Mark Patchak and bookkeeper Melisa Beyer.
The two were later fired, said Catherine J. Tierney, president/CEO of Community First Credit Union.
"Almost $2 million is missing from the institution and lots of other irregularities were uncovered," Tierney told CU Times.
Oshkosh Central filed a civil lawsuit against Patchak in state court to prevent Beyer from selling a boat, camper and SUV worth approximately $120,000.
Oshkosh Central did not file a civil lawsuit against Patchak, who was appointed Oshkosh Central's president/CEO in 1994. He was paid an annual salary of nearly $130,000 in 2012, according IRS 990 forms.
Tierney said Oshkosh Central's board of directors decided to merge in late May with Community One following the findings of state regulators.
Because of Oshkosh Central's challenging financial condition, state regulators waived the requirement of the majority vote of the credit union's members to approve the consolidation.
Though NCUA financial performance reports showed the Oshkosh Central posted a net worth of 10%, it was below peer average of 12%.
Tierney attended the Oshkosh Central annual meeting in June, which was also attended by more than 200 members.
"We explained what happened with the credit union and what would happen as a result of the merger," she said. "We had the opportunity to introduce ourselves. It has been very heartwarming, and we are quite pleased with the members' response."
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