A Brooklyn activist group is protesting the government's decision to seize a troubled credit union and claiming that the institution had begun to turn itself around by the time regulators stepped in.
The National Credit Union Administration put the Central Brooklyn Federal Credit Union into conservatorship Nov. 24, citing lending problems and rapid growth.
Data on income, asset quality, and membership were unavailable from the NCUA or the institution. However, the 5,000-member institution lost money during the first half of 1997, according to Monifa Akinwole, a credit union member and a director of the activist group, Financial Freedom Campaign.
But Central Brooklyn, one of the nation's largest African-American community-based credit unions, did make money in the two months before the NCUA seizure, she said.
"We think the problems the credit union was having could have been remedied on its own very easily," Ms. Akinwole said. The credit union had a plan to address the NCUA's concerns, she said.
NCUA spokesman Bob Loftus said he could not comment on the details but said the agency has serious concerns about the credit union's finances and management.
Last week, during a rally at the credit union, the activists demanded the NCUA return the credit union to local control.
"This institution was not spawned in isolation, it was part of a larger community mission," said Mark Winston Griffith, co-founder of the credit union and executive director of its sponsor organization, Central Brooklyn Partnership.
Mr. Griffith said that the people brought in by the NCUA to run the credit union "weren't part of that larger mission. They don't necessarily know what the membership needs."
Ms. Akinwole said she is concerned that the NCUA will decide not to return the credit union to local control. She said she is worried it will choose instead to liquidate the institution.
But Mr. Loftus said community members should be patient. Of the 150 institutions that the NCUA has seized in the past 20 years, he said, "very few" have been returned to community control in less than a year.
"The fact that we have placed it in a conservatorship speaks to the fact that we want to save this credit union," he said. "We share the desire to return the credit union to the control of its members. It was our goal when the conservatorship was instituted, and it remains our goal now."
The agency, in a statement at the time, said its action was spurred by "weaknesses in lending and high operational costs associated with providing quality service to a rapidly growing membership."
