WASHINGTON -- The government has seized Puerto Rico's troubled corporate credit union.

The National Credit Union Administration said it acted Sept. 9 because the corporate board's nominees for manager were unacceptable.

Only once before had the regulator imposed a conservatorship on a corporate.

The Puerto Rico corporate, Federacion de Cooperativas de Ahorro y Credito, has been managed by Daniel Kampen, vice president and controller for U.S Central Credit Union, since May 30. That was when executive vice president Jose Marrero stepped down.

But Mr. Kampen is scheduled to return to U.S. Central on Sept. 30, which would leave the corporate leaderless.

"We had to take action because otherwise we were faced with a situation where there'd be no manager in there come Oct. 1," said Timothy McCollum, director of the NCUA's southeastern region, who executed the conservatorship order.

Mr. McCollum said none of the acceptable candidates for the job had been nominated by the board of Federacion, which is Puerto Rico-chartered but federally insured.

The board itself became "hopelessly fragmented" and a majority of its members resigned, Mr. McCollum said.

Federation, he added, "needs top-flight management" because of the bevy of problems it is facing: liquidity difficulties, high expense ratios, and operating in violation of an agreement with NCUA.

Mr. McCollum said the liquidity problems have been caused by credit unions' pulling money out of the corporate.

The corporate's assets have dropped about 20% over the past year, to $74 million.

Mr. McCollum said he did not know how long the conservatorship would last, but said the agency was not actively considering liquidating the institution.

In its only other seizure, NCUA merged NAFCU Corporate Federal Credit Union into Capital Corporate Federal Credit Union in the early 1980s.

Nabbing Federacion is the latest step of NCUA's increased involvement in Puerto Rico's credit union industry. Commonwealth officials and the regulator have discussed extending federal coverage to 200 commonwealth-chartered credit unions insured by Prosad, a beleaguered state insurer.

Data for the first quarter of 1994 indicate that 10 of the largest credit unions in the commonwealth are poorly capitalized. At the request of Puerto Rico's credit union regulator, the NCUA will not release June 30 call report data for the commonwealth-insured credit unions, said an industry analyst.

Mr. McCollum said the agency agreed to the request because the credit unions' accounting practices are different and numbers could be misleading.

"Comparability isn't to be found" between figures of federally insured credit unions and those insured by Puerto Rico, Mr. McCollum said.

The regulator is imposing conservatorship only three months after it slapped Federacion with a letter of understanding and agreement. The letter was intended to prevent the corporate from taking on the state-insured credit unions' problems.

The letter barred the corporate from lending to Puerto Rico's troubled state insurer or to any weak credit union.

The letter also required the corporate to spin off trade group activities it had been performing and to comply with an earlier order prohibiting the purchase of fixed assets.

Last year Federacion defied NCUA by purchasing check processing equipment after the agency had rejected the purchase.

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