YUMA, Ariz. – NCUA this evening took under conservatorship troubled AEA FCU, the one-time $410 million credit union that has accrued a growing portfolio of failed member business loans.
The NCUA takeover comes a week after the former head of member business lending at AEA, Bill Liddle, was indicted for taking kickbacks on more than $22 million of MBLs that eventually went bad. The bad MBLs have forced the credit union deep into the red over the past two years, to the tune of $4.4 million for 2009 and $4.7 million for the first three quarters of 2010.
In taking over the ailing credit union, chartered by the Arizona Education Association, NCUA said the credit union is not adequately capitalized, as net worth declined all the way to below 2%, and it has earnings insufficient to enable it to continue under present management. Assets at the end of the third quarter had fallen to just $309 million.
