The letter below was recently provided to KSWT News 13. The letter was written to all AEA members informing them of the conservatorship.More >>
Yuma, AZ December 20 -- The National Credit Union Administration brought in Thomas Martin, a long-time credit union executive, to manage AEA Federal Credit Union, the one-time $410 million credit union taken over Friday evening.
Martin was CEO of Continental FCU, based in nearby Tempe, from 2007 until earlier this year when that credit union was acquired by Chicago giant Alliant CU, and before that was chief financial officer at Arizona Central CU.
He will replace Diane Sweet-McGregor, the long-time AEA executive who had been serving as interim CEO over the past year upon the retirement of Ken Bredemeyer.
Failed member business loans at AEA have created losses of $25.9 million for 2009 and $4.7 million for the first three quarters of the year, pushing down its net worth below 2%. The failed MBLs were approved by the credit union's former director of member business lending, Bill Liddle, who was indicted earlier this month on charges of taking kickbacks to approve the loans.
In taking over the ailing credit union, chartered by the Arizona Education Association, NCUA said the credit union is not adequately capitalized and has earnings insufficient to enable it to continue under present management.
Assets at the end of the third quarter had fallen all the way from $409 million in March 2009 to just $309 million.
Dec. 18, 2010 Yuma, AZ- The National Credit Union Administration has assumed control over a local establishment. The NCUA took over operations at AEA Federal Credit Union in Yuma on Friday.
AEA Federal Credit Union was placed into conservatorship due to it's declining financial condition.
The credit union is not adequately capitalized under standards set forth in the Federal Credit Act, and has earnings insufficient to enable it to continue under present management. The credit union's difficulties stemmed from problems in its loan portfolio. To date, the credit union shrank nearly $90 million in assets from September of 2009.
According to the NCUA, the decision to conserve a credit union enables the institution to continue normal operations with expert management in place correcting previous service and operational weaknesses.
Service to AEA's 49,130 members continues uninterrupted. Members can continue to conduct normal financial transactions – deposit and access funds, make loan payments and use share drafts. AEA Federal Credit Union is a full service credit union, with assets of $309 million, that provides financial service to people residing in Yuma and La Paz Counties, Arizona.
Member deposits are safe. Their accounts are insured up to $250,000 by the National Credit Union Share Insurance Fund (NCUSIF), a federal fund managed by NCUA and backed by the full faith and credit of the U.S. Government.
Two weeks ago Bill Liddle, former AEA Federal Credit Union Vice President of Business Lending, was indicted by a federal grand jury suspected of taking kickbacks on questionable business loans. Liddle's wife and local business man Frank Ruiz were also indicted. All three are scheduled to go to trial in February.
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