RALEIGH, N.C. – The state CU Commission has denied an appeal—the second--by former directors of the Greater Kinston CU of February’s state takeover in the wake of conflict of interest allegations involving loans made by the one-time $17 million community development credit union.
The North Carolina CU Division took over the state chartered credit union Feb. 5 after an investigation showed six of its seven board members-as well as CEO Jennifer Howard-also served on the boards of the Kinston Charter Academy and the Greater Kinston Community Development Center, which received hundreds of thousands in loans from the credit union. Court records indicate the outstanding balance on the loans was $701,000, exposing the CDCU to a potential loss of $1.3 million.
The troubled credit union, whose assets have slid below $12 million since exceeding $17 million in 2009, has been managed by officials with Self-Help CU since the state takeover. Greater Kinston CU has reported losses of $45,000 for the first six months of 2012 and of $37,000 for 2011.