MIAMI — A small credit union involved in a whistleblower suit with employees alleging they were fired for cooperating with NCUA investigators has applied to convert to a state charter, according to a local newspaper.
South Florida Business Journal reported the proposed charter switch comes as two former employees of South Florida FCU alleged in a lawsuit they were fired because of complaints they took to NCUA examiners that Maggie Martinez, CEO of the $36 million credit union, made improper loans to family members.
The credit union has applied to the Florida Office of Financial Regulation for a state charter, according to the report.
However, even if NCUA approves the switch from federal charter—which is required for the state regulatory approval—the credit union will not be rid of NCUA, which will still have ultimate examination and regulatory authority over the institution by virtue of its federal deposit insurance under the National CU Share Insurance Fund.
In its answer the whistleblower suit, the credit union said the termination of the two employees was not related to any co-operation they may have had with the NCUA investigation.
State regulators declined to confirm whether the credit union has applied for a state charter. NCUA said it does not comment on pending charter applications. Credit union officials did not return phone calls seeking comment.
