Regulator Places Alabama One CU Into Conservatorship

TUSCALOOSA, Ala. — The Alabama Credit Union Administration on Thursday placed $598 million Alabama One Credit Union, based here, into conservatorship.

The move by the ACUA is only the latest salvo in an ongoing conflict between the regulator and the credit union. As documented by Credit Union Journal, in April the CU filed a petition in state court alleging Sarah Moore, administrator of the ACUA, did not post the necessary bond to become administrator, nor did she take and file a constitutional oath - both of which are required by Alabama state law. The CU asserted in the petition Moore did not follow the proscribed steps after she was appointed to take over as administrator of the ACUA for former administrator Larry Morgan on April 15, 2014, and therefore Moore had "vacated her office" and "all actions taken after vacating her office are void."

In late June, Alabama One CU filed a federal lawsuit against various senior state officials alleging conspiracy and abuse of power. The credit union listed allegations against several defendants, including current and former administrators of the ACUA, conspired to improperly influence state officials and also "grossly abused" their power and positions "solely to enrich" a political and personal friend, Tuscaloosa attorney Justice D. "Jay" Smyth III.

In the lawsuit, Alabama One CU said the alleged actions had placed the credit union on the brink of conservatorship.

On Thursday, that step was taken by the ACUA. The state regulator said in a press release it placed Alabama One into conservatorship, "to enable the credit union to continue regular operations with experienced management appointed by ACUA subject to approval and to correct previous service and operational weaknesses."

While continuing normal member services, "ACUA will serve as conservator for the institution," the regulator added.

Alabama One serves 60,000-plus members, according to the credit union's most recent Call Report.