NCUA Cites Tennessee CU For Dangerous Operations
FRANKLIN, Tenn. – NCUA made public today a rare supervisory agreement with Veritas FCU, a one-time $50 million credit union that has been losing money and “may be in serious jeopardy”.
The Letter of Understanding and Agreement will require the credit union, which has seen its assets fall to just $33.7 million, to start repossession or foreclosure proceedings on members within 90 days after a loan has become delinquent; hold monthly meetings of its asset liability committee; delineate mortgage that exceed 100% loan-to-value, and increase funding for allowance for loan losses, among other things.
“We are concerned that your credit union may be in serious jeopardy,” said NCUA in the LUA. “For this reason, we are asking you to join with us to formally recognize the seriousness of Veritas’ situation.”
The directed actions, stated NCUA, are for the benefit of the National CU Share Insurance Fund, Veritas, “and, more importantly, your credit union’s members.”
Veritas reported a $337,000 loss for 2008, a $1.2 million loss for 2009 and a $28,814 loss for the first half of 2010, and net worth of 7.9%, which was only kept at that level because of the vast decline in total assets. The increased funding for loan losses would cut net worth to 4.9%, NCUA said.
The credit union, which serves employees of Nissan America, moved from California to Tennessee in 2008.