The NCUA on Monday preserved the Empire Financial Federal Credit Union for $ 3 million, which managed unsecured loans, primarily Paycheck Protection Program loans, totaling $ 1,634,968 in 2020, compared to just $ 54,171 in unsecured loans in 2019.
The independent federal agency said it received the Jackson, New Jersey-based credit union because of unsafe and unsafe practices that were unspecified.
Gerald Goldenbroit, who served as president / CEO of the credit union for nearly nine years and served as NCUA auditor for 18 years, said Empire Financial had no security or solidity issues.
He said when he received a notice about the conservatory from the NCUA on Monday he was “totally dismayed”.
“I believe the facts will confirm that the actions taken by the NCUA were totally unjustified,” Goldenbroit said when reached by CU Times on Tuesday. He declined to comment further at this point.
The NCUA said in a prepared statement that membership services will continue uninterrupted by appointment at the credit union’s new location at 22 Cortlandt Street in Manhattan.
That address is the same office building in the heart of Wall Street for another $ 4.1 billion conserved financial cooperative, the Municipal Credit Union. The NCUA said Empire Financial’s new temporary location for member services is closer to the core FOM, and office space was available in the office building on Cortlandt Street.
Empire Financial’s December 2020 Call Report listed 52 unsecured loans / lines of credit, the majority of which were SBA PPP loans of more than $ 1.6M. The credit union charged an interest rate of 10% on these loans.
While Empire Financial loan income rose from $ 24,164 in 2019 to $ 43,803 in 2020, fee income increased from $ 58,787 to $ 243,363 in 2020, according to NCUA financial reports. The New Jersey Credit Union has total PPP credit facility $ 2,212,725 listed as Total Loan as per their December 2020 Call Report.
As of the end of the first quarter of 2021, Empire Financial listed 41 unsecured loans valued at $ 1,243,711, including SBA PPP loans. According to their call report, the credit union charged an interest rate of 3.50% on these loans. Empire Financial loan income was $ 29,366 at the end of the first quarter of this year, compared to $ 9,169 at the end of the first quarter of 2020, while fee income increased significantly from $ 322 in the first quarter of 2020 to over $ 60,000 in the first quarter of 2021.
Empire Financial has also listed $ 1,208,965 as total credit under the PPP Credit Facility, according to the Call Report.
Empire Financial ended 2020 with a profit of nearly $ 144,000 compared to a loss of $ 21,000 in late 2019. As of the end of the first quarter of this year, the credit union posted a profit of $ 52,349 versus a loss of $ 10,371 in late 2020 first quarter NCUA financial reports.
In March 2020, the credit union recorded net assets of 2.43%, while net assets rose to 9.72% in March 2021.
Empire Financial was founded in 1976 and served 343 members.