ROCKVILLE, Md. – NCUA on Tuesday issued a supervisory order to Montgomery County Teachers FCU, a troubled, one-time $468-million credit union in the process of merging with nearby Educational Systems FCU – which will create one of Maryland’s largest credit unions.
Under NCUA’s cease and desist order, the ailing credit union must comply with requirements to rebuild its declining net worth ratio, which was just 4.3% at March 31, ensure the financial statement audit is completed and all accounts are reconciled by May 31, and address operational deficiencies and strengthen internal controls.
It is not clear what effect the NCUA directive will have on the merger, which will create a credit union spanning six Maryland counties from the Washington suburbs to the Eastern Shore. The new credit union would have almost $800 million in assets, more than 95,000 members and 10 branches.
MCT FCU, which is based in the D.C., suburb of Rockville, Md., reported losses for four years in a row, before eking out a $68,000 net for the first quarter of 2012. Its assets declined from a high of $458 million in 2008 to $384 million.
Educational Systems is based in the nearby town of Greenbelt, Md., and also serves teachers in Maryland’s Prince George’s, Charles, St. Mary’s, Calvert and Talbot counties. It reported a $472,000 net for the first quarter and net worth of 9.5%.
