The Hmong American Federal Credit Union in St. Paul was seized by federal regulators Wednesday because of operational weaknesses.
The credit union, which has 716 members and has served the Hmong community since its opening in 1984, is now being operated by the National Credit Union Administration, a federal agency. The credit union's sole office on Western Avenue in St. Paul has been moved to 56 E. 6th St. in St. Paul, an existing branch of Spire Federal Credit Union.
David Small, a spokesman for the NCUA, said regulators "had concerns over their operations." He declined to be more specific. The credit union did not respond to calls for comment.
Hmong American, with $2.7 million in assets, appeared to be in healthy condition. Last year, the credit union's profit more than tripled to $48,482. The credit union net worth, as a percentage of its assets, was a healthy 15.98 percent as of March, well above the regulatory minimum of 6 percent.
"This is another reminder that you can't always trust the numbers," said Marvin Umholz, a consultant to credit unions in Olympia, Wash.
The NCUA has seized nine credit unions nationwide so far this year, and 43 since the beginning of 2009.
This is the first Minnesota credit union to be taken over by regulators since the financial crisis began. However, several have been forced to sell themselves after losses on real estate-related loans wiped out much of their capital.
In early 2009, Fort Snelling Federal Credit Union in Minneapolis was on the verge of failure when regulators stepped in and arranged a sale to Hiway Federal Credit Union of St. Paul.
Chris Serres 612-673-4308