However, defenders of the agency challenged that view, pointing out that the previous ACUA administrator, Larry Morgan, suspended four Alabama One employees in March 2014, but then had to lift the suspensions two weeks later when the credit union and controversial Alabama One member Danny Butler challenged them in court.

Sources speaking on background said they believed Morgan retreated in the face of legal pressure because he had not laid sufficient legal and administrative groundwork to support the suspensions. One source agreed with this notion and specified that Morgan had suspended the employees for an alleged infraction that did not carry the suspension penalty in the statute.

"That's not saying that the infraction didn't happen or that the suspensions would not have been appropriate, but as the ACUA is a creature of statute, any change to have recognized that problem would have required a change in the law," the source explained.

Morgan resigned from his position after reversing the suspensions and could not be located for this story.

Nevertheless, agency critics pointed out on background, a situation such as Alabama One's could still arise again because of the manner in which the ACUA has been structured.

The Alabama legislature moved credit union regulation out of the Alabama State Banking Department and created the ACUA in 1985, after credit unions complained the banking regulator could not fairly regulate them.

In much the same way as federally-chartered credit unions pay fees to fund the NCUA, state-chartered credit unions pay fees to fund the ACUA. This funding structure keeps the as ACUA an independent agency, but also increases its dependence on the very institutions it is supposed to regulate.

According to the League of Southeastern Credit Unions (LSCU), there were 65 state-chartered credit unions in Alabama as of the close of 2014. With a number that small, observers pointed out, the departure of any credit union would damage the agency's budget and perhaps provide a disincentive for aggressive agency investigation and enforcement.

According to the National Association of State Credit Union Supervisors (NASCUS), 45 states have state-chartered credit unions and of those, six (Alabama, Kansas, Missouri, North Carolina, Texas and Wisconsin) have credit union regulators that are not part of agencies that regulate other financial institutions. A NASCUS survey, published in 2013, reported that these six states also have their own budgets, but that five of the six require their legislative and executive branches to approve their budgets.

Only Texas has a credit union regulator that does not require either its legislative or executive branch to approve its budget, according to the survey.

Read more: The ACUA's advisory board must approve any cease desist order before it is carried out …

Further, the ACUA's current advisory board is comprised of the Administrator, five state-chartered credit union CEOs and a supervisory committee member from a state-chartered credit union, and a majority of these members, whose institutions are regulated by the ACUA, must approve any cease and desist order before it can be issued by the ACUA, according to Alabama statute.

In addition, it is unclear whether the ACUA has been able to keep up with changes in the industry and among its credit unions, observers noted.

For example, according to CUNA, Alabama had 99 state-chartered credit unions in 1985 when the legislature formed the ACUA, with just over 403,000 members and $1 billion in assets. By 2013, the number of credit unions dropped to 65, but the number of members rose to more than a million and the assets to $10.4 billion.

"The largest credit union in the state was less than $200 million back then," a former credit union executive, who declined to speak for the record, wrote in an email. "Share draft accounts were just beginning. No credit cards, debit cards. No business lending. Very little mortgage lending. As credit unions have changed, how has the ACUA changed? The entire staff now is supposed to oversee more than $10 billion in credit union assets. How can six people examine credit unions effectively while also keeping up with training on ever-hanging regulations and new service offerings?"

According to the NASCUS survey, ACUA had a budget of $1.34 million in 2014.

No one from the ACUA was available to comment for this story, but ACUA Administrator Sarah Moore made a presentation to the LSCU in 2014, in which she appeared to recognize some of the agency's structural challenges.

In her November 2014 presentation to the LSCU's meeting in Destin, Fla., Moore recommended revising the Alabama Credit Union Act to remove the requirement that the ACUA Administrator first receive an agreement from the majority of the ACUA's Advisory Board before the agency can issue a cease and desist order.

Moore's proposal also included making the Board of Advisors the appellate body for the Administrator's actions.

In addition, the proposal included allowing state-chartered credit unions to pay their directors as a way of attracting and retaining board members with expertise to oversee credit unions, as well as allowing credit unions and banks to merge more easily. Moore also proposed allowing the ACUA to take testimony under and compel testimony and documents during examinations.

A bill providing some of what Moore proposed passed the Alabama House of Representatives on April 9. HB179 changed nomination procedures for new board members as well as the circumstances and procedures for board member removal.

However, the bulk of what Moore proposed in her presentation was not in the legislation.

Patrick La Pine, president/CEO of the LSCU declined an interview request on this topic citing a travel conflict; however, Mike Bridges, vice president of the league, had supported the legislation.