May 17, 2019
DEPARTMENT OF FINANCIAL SERVICES TAKES POSSESSION OF MUNICIPAL CREDIT UNION AND NAMES NCUA AS CONSERVATOR
Acting Financial Services Superintendent Linda A. Lacewell today announced the Department of Financial Services (DFS) has taken possession of Municipal Credit Union (MCU) because of unsafe and unsound conditions and has appointed the National Credit Union Administration (NCUA) as conservator.
Member accounts at MCU are protected by the National Credit Union Share Insurance Fund, which is administered by the NCUA. The Share Insurance Fund insures individual accounts up to $250,000; a member’s interest in all joint accounts combined is insured up to $250,000. The NCUA Share Insurance Fund also separately protects IRA and KEOGH retirement accounts up to $250,000. The Fund has the backing of the full faith and credit of the United States.
“DFS is taking possession of MCU and appointing the NCUA as conservator in order to continue the close joint DFS/NCUA monitoring of the credit union’s condition, operations, and controls, to ensure that member funds are protected and that member services continue without interruption,” Acting Superintendent Lacewell said.
In 2017 DFS had uncovered deficiencies in board oversight that had facilitated the multi-million-dollar embezzlement by the former CEO, Kam Wong. Wong was charged by the Manhattan U.S. Attorney with embezzlement and banned from the credit union industry by the NCUA in May 2018. He pleaded guilty to embezzling nearly $10 million from MCU in November 2018.
The Department removed MCU’s Supervisory Committee in May 2018, and its board of directors in June 2018 due to severe deficiencies in their oversight of the over-all management of the affairs of the credit union and designated an on-premises Administrator to oversee the general management of the credit union. Based on ongoing supervision by DFS and NCUA, DFS made the decision today to appoint NCUA as conservator and terminate the Administrator’s engagement.
While continuing normal member services, NCUA will work to resolve issues affecting the credit union’s operations. Members can continue to conduct normal financial transactions, deposit, access funds, make loan payments, and use shares. MCU is a New York State-chartered credit union.
For answers to frequently asked questions that MCU members may have, please click here.