Kansas regulators have seized control of a Topeka credit union and removed its president and board of directors.
Santa Fe Credit Union, with $38 million of assets, was cited for its high rate of loan defaults.
In 1998, the credit union wrote off $3 million in loans, about $2 million more than had been anticipated. Kansas regulators typically take notice if annual writeoffs total more than $350,000, said Jerel Wright, administrator of the Kansas Department of Credit Unions.
Mr. Wright blamed Santa Fe's loan problems on insufficient collateral and poor oversight by the credit union's board and its president, Michael Heath. Mr. Heath was replaced by a managing agent, who will help the state search for a successor.
Despite the loan troubles, the credit union remains in good financial health, Mr. Wright said. Santa Fe is the first Kansas credit union to be taken over by regulators since 1992.