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Florida state regulator issues ceasedesist against CU
TALLAHASSEE, Fla. (4/3/09)--The Florida Office of Financial Regulation (OFR) has issued a cease and desist order against Eastern Financial Florida CU, a $1.69 billion asset credit union based in Miramar, Fla. The March 19 order, which the credit union consented to, outlines 15 practices the credit union must cease and orders the credit union to improve its capital level, establish a complete and effective management team, and deal with problem loans, including member business loans (South Florida Business Journal April 1). Last year, the credit union lost $40.2 million, which meant its net worth-to-total asset ratio fell dropped to 6.5%, below the regulator's 7% ratio required for a well-capitalized credit union. OFR's order requires Eastern Financial Florida to submit a plan to restore its net worth to well-capitalized levels. The credit union has not had a permanent CEO since Stephen McGill left the position in February 2008. OFR ordered it to evaluate all executive positions for weaknesses and hire additional ones, including a CEO. Other issues, said OFR, included operating without effective leadership or oversight; operating without adequate core deposits; operating without adequate policies to fund future losses of problem loans; operating without adequate loan writing standards and loan reviews; and carrying an excessive concentration of member business loans. According to the article, the credit union said it is addressing the concerns "quickly and fixing them so we can come out of this recession sooner than other financial institutions." The credit union's statement added it is proud of the work its staff has already done to mitigate the impact of the state and national economy.


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