An investigation is under way at the $3.3 million G H Woodworkers Federal Credit Union in Aberdeen, Wash., after “several unusual events” occurred last year that prompted the board to place its president/CEO on administrative leave and merge the cooperative.
Penny S. Sudderth, who was appointed interim president/CEO of GHW FCU in March, confirmed Tuesday that an internal investigation was under way by its insurance company. She declined to give additional details about the investigation and did not know when it would be completed.
“There is an investigation under way by our bonding company, CUMIS,” Sudderth said. “I can’t tell you anything because I don’t know.”
In a letter to members on Dec. 30, GHW FCU Board President Walt Hilliard wrote that it was with a heavy heart to report the news of the credit union’s consolidation with the $131 million Great NorthWest Federal Credit Union also based in Aberdeen.
“Many of you may have wondered why Penny and I have been in the office since March 2016,” he wrote. “There were several unusual events that occurred including an office fire. Federal examiners encouraged the board to place the manager on administrative leave pending [an] investigation.”
According to the credit union’s profile documents filed with the NCUA, Krista Putnam was the president/CEO of GHW FCU from at least the third quarter of 2014 to March 2016.
Before Putnam’s appointment, Sudderth served as the president/CEO since at least 2012, according to the credit union’s profile documents available online.
In a phone interview with CU Times, Hilliard said the fire, which occurred in March, did not cause extensive damage to the office and no one was injured. He also declined to comment on the investigation and did not know when it would be completed.
At the end of December 2016, the credit union’s net worth was 1.46%, down from 12.56% at the end of 2012, according to NCUA financial performance reports. GHW FCU’s ROAA was -17.92% at the end of last year.
Although GHW FCU saw a steady increase in assets and loan income since 2012, it posted net income losses of $58,596 in 2012, $27,293 in 2015 and $501,911 in 2016, according to NCUA financial performance reports. Additionally, GHW FCU’s total operating expenses skyrocketed from $46,964 in 2012 to $513,304 in 2016.
To protect the members, Hilliard said, the board decided the only recourse was to merge. The consolidation was finalized Tuesday.
“It’s better for the members to do this [merger] at this time,” he said.
GHW FCU’s current location will remain open for at least three months, maybe longer depending on the circumstances, he said.
GHW FCU, which served more than 800 members, was chartered in 1955 to serve the needs of unionized woodworkers and their families. The credit union expanded its field of membership to serve other SEGs.
