Financially Ailing CU Cited For FOMViolation
TOLEDO, Ohio - (06/15/06) NCUA Wednesday issued a raresupervisory agreement which criticized a credit union for failingto adhere to its field of membership. In a Letter of Understandingmade public Wednesday, NCUA said the future of the financiallytroubled Toledo Metro FCU could be in seriousjeopardy if it does not address numerous adverse conditionsincluding poor loan quality, weak management and field ofmembership violations. The $18 million credit union reported a lossof $380,000 and a delinquency ratio of 2% for 2005; and a loss of$96,000 a delinquency ratio of 1.4% for the first quarter of 2006.The supervisory agreement requires the credit union to immediatelycease making any new subprime loans; or those members with morethan two unpaid collection items or any unpaid charge-offs on theircredit record; or members who have been delinquent with the creditunion within the last six months. In addition, the LUA will requirethe credit union to verify member eligibility when they join; andto review the current membership in order to document eligibility.NCUA ordered Toledo Metro FCU to immediately close down any memberaccounts that do not meet FOM eligibility and to cease providingservices for anyone outside their FOM.