Regulators Claim Books Cooked Prior To CUTakeover

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LAWRENCE, Kan. - (03/27/06) – State regulators took over alocal credit union conglomerate after discovering a number offinancial improprieties, including the booking of a $3 million loanthat had not been made on the final day of 2005. The Credit unionGroup–a conglomeration of four area credit unions–alsoappeared to have engage in other financial tricks, according to acease and desist order issued by regulators in connection with therare state conservatorship. They included: under-reporting of loandelinquencies; insider loans; and under-reporting of expenses.Credit Union Group, with $20.5 million in assets, was comprised offour credit unions that had been combined a few years ago: FreeState CU, Kansas City Metropolitan CU, Colgate-Palmolive EmployeesCU and Employees CU of Puritan Bennett.

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