One Local Credit Union Seized, Another to Be Bought
Two local credit unions are undergoing major changes-one by force and one by choice.
The Hmong American Federal Credit Union in St. Paul was seized by federal regulators on Wednesday due to “operational concerns”-while the Ukranian Credit Union of Minneapolis is poised to be acquired.
National Credit Union Administration (NCUA) spokesman David Small declined to reveal precisely why his agency has placed the Hmong credit union into conservatorship, but he said Thursday that its managers will immediately be replaced with interim managers who will investigate the agency's concerns.
The Hmong credit union-which will continue to serve members while under conservatorship-has 716 members and assets totaling $2.7 million. It provides financial services to members of the Lao Family Community of Minnesota, Inc.
Small said that unlike most cases in which a credit union is placed in conservatorship, the credit union's financials are strong. In 2010, net income totaled $48,482-up substantially from $14,110 the previous year. Its net worth as a percentage of total assets, meanwhile, was 15.73 percent at the end of 2010, more than twice as high as the federally mandated 6 percent minimum.
In most cases involving a credit union seizure, its managers are permanently replaced following NCUA's involvement, Small said.
On the other side of the river, the Ukranian Credit Union is about to be bought by Plymouth-based TruStone Financial Federal Credit Union for an undisclosed sum.
The two credit unions plan to merge operations in mid-summer pending approval from the NCUA.
Following the acquisition, TruStone will have eight branch locations across the Twin Cities-including the Ukranian office. Ukranian Credit Union's president, Oksana Bryn, will become branch manager of Ukranian's current location after it officially becomes part of TruStone's network. All four of the credit union's other employees will also be retained.
TruStone has $664 million in assets and nearly 57,000 members. Ukranian Credit Union, meanwhile, has $6 million in assets and more than 1,245 members-who are Ukranian, Eastern European, and American.