BIRMINGHAM, Ala. – Alabama Central CU is suing CUNA Mutual’s CUMIS Insurance Society unit over a $3 million loss caused by improper lending by one of its former executives.
The credit union filed a lack of faithful performance claim saying that improper loans approved by former senior vice president William Kiser, Jr., caused a loss of almost $3 million. The credit union says Kiser violated its loans policies and engaged in improper behavior by approving loans to a local trucking company that eventually went bad.
In a response to the suit, CUMIS said Alabama Central failed to file its claim within the two years it learned of the executive’s behavior, as required under the fidelity bond.
In a statement, CUNA Mutual said the claim was denied because “we believe it does not fall within the Faithful Performance coverage under the Bond.”
