The National Credit Union Administration and Illinois Department of Financial and Professional Regulation assumed control of Bagumbayan Credit Union in Chicago last week.
Founded in 1964, the credit union is a federally insured, state-chartered institution with 44 members and $55,140 in assets. It is the fifth federally insured credit union to be placed into conservatorship this year.
Member services will continue uninterrupted as a result of an agreement between NCUA and Great Lakes Credit Union based in North Chicago—the credit union will manage Bagumbayan while it is in conservatorship.
Deposits will remain protected by the National Credit Union Share Insurance Fund, which will insure accounts at Bagumbayan by up to $250,000.
The action follows an October cease-and-desist order from the NCUA, which requested that Bagumbayan not allow unapproved bank officials to attend board meetings or perform managerial functions and that the institution resolve its recordkeeping issues and address violations of the Bank Secrecy Act.
In July, the Illinois Department of Financial and Professional Regulation said in a suspension order issued to Bagumbayan that the institution was operating in an “unsafe and unsound manner by operating at a loss during each of the last five fiscal years” and “by allowing its net worth to decrease by nearly 36 percent over the last five years.”