The $613 million Alabama One Credit Union filed suit in state court to block a cease and desist order from the Alabama Credit Union Administration that the NCUA affirmed.
In its April 24 complaint, the cooperative charged that the cease and desist order, which the ACUA issued April 2 and published on April 23, was null and void because ACUA Administrator Sarah Moore had not taken the oath of office or posted a required $25,000 bond.
“Pursuant to Alabama law, the administrator of the ACUA is required to take a Constitutional oath and give a bond in the sum of $25,000.00 before discharging his or her official duties.
The statute also requires that the oath and bond be filed with the Secretary of State,” the credit union wrote in its complaint.
“After a complete and thorough search of the records maintained by the Alabama Secretary of State, the Division Director for the Government Support Division confirmed that there are no records on file with the Secretary of State of a bond or oath executed by Moore in her position as administrator of the ACUA,” Alabama One added.
“Because the deadline to execute and file the official bond has passed long ago, Moore vacated her office on June 5, 2014, and her actions taken as administrator since that time are void as a matter of law.”
Because Moore had not been properly ACUA Administrator, the ACUA's cease and desist order is also void, the credit union argued.
No one had yet become available from the ACUA or its law firm to comment on the complaint, but an Alabama lawyer who declined to speak on the record because he had not yet studied the matter remained skeptical about the complaint's success
The trial court is likely to stay the proceeding, pending a correction or oversight of the error or oversight if Moore had not actually taken the oath or posted the bond, the lawyer observed.
“As a general rule, a trial court is not going to exalt form over substance,” the lawyer said. At best, I think this may be a delaying tactic. Alabama One is still going to have to face the cease and desist order's substance, the attorney added.
The 18-page cease and desist order required Alabama One to hire a new CEO, lending officer and COO as well as make many other changes such as training its board, putting SAR and CTR procedures into place and exiting member business lending.
Complete your profile to continue reading and get FREE access to CUTimes.com, part of your ALM digital membership.
Your access to unlimited CUTimes.com content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking credit union news and analysis, on-site and via our newsletters and custom alerts
- Weekly Shared Accounts podcast featuring exclusive interviews with industry leaders
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the commercial real estate and financial advisory markets on our other ALM sites, GlobeSt.com and ThinkAdvisor.com
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
