NCUA Places Bethex FCU Into Conservatorship, Citing 'Operational Weaknesses'

NCUA on Friday placed Bronx, N.Y.-based Bethex Federal Credit Union into conservatorship.

The regulator said normal member services at the $12 million credit union's office at 20 East 179th Street in the Bronx will continue uninterrupted.

"NCUA placed Bethex into conservatorship to enable the credit union to continue regular operations with experienced management in place and correct previous operational weaknesses," the regulator said in a statement. "While continuing normal member services, NCUA will work to resolve issues affecting Bethex Federal Credit Union's safety and soundness."

In June, Bethex FCU was one of more than 50 credit unions cited in a report by the Financial Crimes Enforcement Network (FinCEN) as being "at risk of serving as a conduit for money laundering activities."

FinCEN did not accuse any credit unions of any illicit activities, but the common denominator for those institutions named in the confidential report is that many of them serve money-services business (MSBs) such as check-cashing firms or remittances businesses—businesses that many large banks refuse to serve due to the potential compliance risk, which some have suggested may be pushing these businesses to more aggressively court credit unions.

Chartered in 1970, Bethex FCU serves multiple occupational and associational groups and communities primarily located in the Bronx. It has 5,584 members and $12,951,096 in assets, according to the credit union's most recent Call Report.