NCUA Slaps Tiny Brooklyn Credit Union With Cease-and-Desist Order

The NCUA on Thursday publicly released a cease-and-desist order against the $786,241 InterAmerican Federal Credit Union in Brooklyn, N.Y.

The order, which was issued in early May, showed the credit union agreed to take eight actions and was required to complete some of them by Thursday.

Several of the order’s items that seemed to be the most important included resolving the out of balance conditions with loans, shares, cash and undivided earnings, obtaining an AIRES share and loan download and reconciling the download to the general ledger, and providing written, supporting documentation for the resolution of all out of balance conditions.

Additional important items also require the credit union to reconcile its Vizo Corporate account and Carver Federal Savings account, and record any necessary correcting entries to the affected credit union general ledger accounts; implement a record keeping system to properly monitor and identify all transactions for suspicious activity and file Suspicious Activity Reports; and develop written procedures to follow the Credit Union’s Office of Foreign Asset Control Policy, and check all parties to transactions against the OFAC Specifically Designated Nationals list prior to completing the transaction.

Other items of the order require the credit union to obtain a final Supervisory Committee Audit report from a certified public accountant for the month period ending March 31, 2022, provide Bank Secrecy Act training to all credit union officials and staff, obtain an independent member account verification and document additional verification procedures on any members with an undeliverable account statement, and escheat all dormant accounts to the State of New York.

At the end of the first quarter, 21% of Inter-American’s loans were delinquent, according to NCUA financial performance reports. In 2017 and 2018, the credit union’s loan delinquency was 22% and increased to 23% in 2019 and 2020. Last year, the loan delinquency was 22%. The peer average is 3.47%.

The credit union’s loan portfolio showed only unsecured loans.

In 2017 and 2018, Inter-American posted income gains of $4,490 and $1,588, respectively, but in 2019 and 2020, the credit union recorded losses of $2,646 and $2,149, respectively. At the end of last year, the credit union had a gain of $152 and a gain of $482 at the end of this year’s first quarter, according to NCUA financial performance reports.

Inter-American President/CEO David Dyer did not respond to CU Times‘ request for comment on Thursday.

The credit union serves 1,281 members.