A credit union in a small Minnesota town has been liquidated by regulators and is also the subject of an ongoing FBI investigation.
The National Credit Union Administration (NCUA), the primary government regulator for federal credit unions, recently announced that the Minnesota Department of Commerce has liquidated St. Francis Campus Credit Union in Little Falls, a small town with a population of roughly 8,300.
The regulatory agency said it was appointed receiver for St. Francis Campus Credit Union and is serving as the “liquidating agent.” St. Francis Campus Credit Union’s 3,400 members and $51 million in assets have been acquired by the much larger Melrose-based Central Minnesota Credit Union, which has $759 million in assets and 52,000 members.
“The Minnesota Department of Commerce made the decision to liquidate St. Francis Campus Credit Union and discontinue its operations after conducting an examination and determining the credit union was insolvent with no prospect for restoring viable operations on its own,” the NCUA said.
Meanwhile, the credit union is also the subject of a joint investigation involving the FBI, the Minnesota Department of Commerce, the NCUA, and the Little Falls police department, FBI spokesman Kyle Loven told Twin Cities Business.
Loven said that in late January, investigators were notified of “irregularities occurring at the credit union,” although he declined to elaborate on the nature of those “irregularities,” citing the ongoing investigation. No arrests have been made, and if any signs of wrongdoing or criminal activity are uncovered, the findings will be turned over the Minnesota’s U.S. Attorney’s office in Minneapolis, which would determine whether to prosecute, Loven said.
The St. Francis Campus Credit Union was chartered in 1963 and served employees of the St. Francis Campus and its owners, the “Franciscan Sisters,” according to the NCUA. The Franciscan Sisters are a Roman Catholic congregation of religious women, and the St. Francis Campus includes assisted living services, a health and recreation center, and more, according to the group's website.
The NCUA said former members of the St. Francis Campus Credit Union are now members of Central Minnesota Credit Union, and they should not experience any interruption in the services they receive.
The St. Cloud Times, which also reported on the investigation, said its calls to the St. Francis Campus Credit Union were forwarded to the Central Minnesota Credit Union, whose CEO said he was unclear what is meant by alleged “irregularities” at the liquidated credit union.
Gloria Lust—who retired after a 25-year career as a nurse for the St. Francis campus and was chair of the board that oversaw the credit union—told the St. Cloud Times that the board was “devastated” by the recent developments. She reportedly described the news as “a surprise to everybody—especially since we got the highest ratings from bank examiners for the last 10 years.”
The St. Francis Campus Credit Union is the second federally insured credit union to be liquidated this year, according to the NCUA. The Bagumbayan Credit Union, a small institution in Chicago, closed in January.
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