RAPID CITY, S.D – In rare supervisory action, NCUA yesterday issued a cease and desist order directing Rapid City Telco FCU to halt construction on its new branch, near the presidential monuments Rushmore Crossing shopping center, or any additional fixed assets without NCUA approval because the $47 million credit union has exceeded the agency’s fixed assets rule.
The rare order directs Rapid City Telco to cease paying for any expenditure related to the project and to submit all bills for approval. The order also requires the credit union to submit a plan to bring it into compliance with its fixed assets rule. Among the options NCUA directed the credit union to consider are: termination of the Rushmore Crossing lease; reduction of all planned purchases of furniture and equipment for its facilities; the sale of its new Hills City branch; or, request a waiver of the agency’s fixed asset rule.
The project has increased the credit union’s investments in fixed assets to more than 8% of total assets, exceeding NCUA’s limit of 5% of shares and retained earnings. Partly because of costs related to the project, Rapid City Telco reported a loss of $242,000 for 2009.
