ALEXANDRIA, Va. - The Director of the Michigan Department of Insurance and Financial Services on Friday placed Detroit's Health One Credit Union into conservatorship due to the "recent discovery of unsafe and unsound practices."
NCUA was named as agent to handle the $18.1 million-asset credit union's day-to-day operations.
The state and federal regulators said while continuing normal member services, they will "work to resolve issues affecting the credit union's safety and soundness."
The end came quickly for Health One, which reported positive earnings and healthy net worth ratios for at least six consecutive years until a major decline in 2013.
In 2013 Health One CU lost more than $1.3 million, including paying a $15,296 NCUSIF premium. Its net worth ratio was 4.52% ("undercapitalized"). The credit union lost an additional $181,746 in the first quarter of this year, as its net worth ratio slipped to 3.9% ("significantly undercapitalized") as of March 31.
A quick examination of the past six years:
- In 2012 Health One CU reported $139,156 in net income, after assessments, with a net worth ratio of 11.22% ("well capitalized").
- In 2011 it made $29,010 from operations, but paying $31,707 to the Corporate CU Stabilization Fund left it with a small loss of $2,697. Its net worth ratio was 12.97% ("well capitalized").
- In 2010 it had $191,996 in net income, even after more than $26,000 in assessments, and a net worth ratio of 14.38% ("well capitalized").
- In 2009 it had $145,684 in net income, with a net worth ratio of 15.29% ("well capitalized").
- In 2008 net income was $55,489 and net worth ratio was 10.47% ("well capitalized").
- In 2007 net income was $119,926 with net worth ratio at 11.5% ("well capitalized").
Health One CU has 3,882 members, according to its March 31 call report. Chartered in 1957, the institution serves residents of Macomb, Oakland, Washtenaw and Wayne counties in Michigan. The CU also operates a branch in Cleveland.
