Just 10 days after it was publicly revealed that the $28.7 million Louisville Metro Police Officers Credit Union was under investigation for suspected internal theft, the Louisville, Ky., cooperative was conserved by the NCUA Friday.
“The NCUA placed Louisville Metro Police Officers Credit Union into conservatorship to allow the credit union to continue regular operations with experienced management in place and to correct operational weaknesses,” the federal agency said in a statement. “While continuing normal member services, the NCUA will work to resolve issues affecting the credit union’s safety and soundness.”
The NCUA did not specify the credit union’s operational weaknesses.
According to third quarter NCUA financial performance reports, LMPOCU is well-capitalized and profitable with a net worth of 11.28% and an ROAA of 1.41%.
However, LMPOCU posted a delinquent loan rate of 1.75%, higher than the peer average of 1.20%. In addition, in 2014, the credit union posted a delinquent loan rate of 4.46%, while its delinquent loan rate was more than 2% in 2012, 2013 and 2016, according to NCUA financial performance reports.
LMPOCU’s operating expense has also been consistently higher than the peer average of 3.53% from 2012 to the end of this year’s third quarter. For example, the Kentucky credit union’s operating expense was more than 4% in 2012, 2013 and 2015. And in 2015, it posted an operating expense of 5.76%.
LMPOCU’s former President/CEO Sharon L. Burden received a salary of $111,745, according to the credit union’s 2015 990 Form that it filed with the IRS.
When contacted by CU Times last week, state and local authorities acknowledged that an investigation had been launched regarding suspected internal theft at LMPOCU.
Cole McCollum, an AVP and compliance officer for the credit union, declined to comment, however. He also would not comment on a local media report that a vice president at the credit union had been suspended, and that the alleged theft involved a number of fake loans that were made in police officers’ names.
The Kentucky Department of Financial Institutions said it is conducting an examination of the credit union, and as part of that process, examiners will address the reported theft.
Dwight Mitchell of the LMPD said the department’s financial crimes unit initiated an investigation, but it was handed over to the FBI.
