NCUA Liquidates Inter-American Federal Credit Union
The federal agency says the Brooklyn, N.Y., financial cooperative was not operating in a safe and sound manner.
The NCUA on Wednesday liquidated the $727,157 Inter-American Federal Credit Union in Brooklyn, N.Y., after determining it was not operating in a safe and sound manner.
Inter-American posted a net income loss of $21,905 at the end of the fourth quarter. The credit union also recorded a delinquent loans plus net charge-offs ratio of 21.89%, which was substantially higher than the peer average of 3.87%, according to NCUA financial performance reports.
In June, the federal agency publicly released a cease-and-desist order against the credit union, which served 460 members.
The order, which was issued in early May, required the credit union to take eight actions such as 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.
The credit union also was required to implement a record keeping system to properly monitor and identify all transactions for suspicious activity and file suspicious activity reports. In addition, it was required to develop written procedures to follow 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 required the credit union to obtain a final Supervisory Committee Audit report from a certified public accountant, 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.
The credit union, chartered in 1964, primarily served members of Hanson Place Seventh Day Adventist Church in Brooklyn.
Inter-American was the first federally insured credit union to fail in 2023.