mcu coney island

HAPPIER TIMES: Back in 2011, former MCU CEO Kam Wong was joined by former Brooklyn Borough President Marty Markowitz at a ribbon cutting for a new MCU branch office in Coney Island. MCU employees have been offered a buyout so that the credit union can reduce its workforce in preparation for closing five branches.

The Municipal Credit Union, the subject of an ongoing FBI investigation that has produced the conviction of two high-ranking officials, including its former CEO, has offered buyout packages to employees to clear the way to close five of its 16 branches, The Chief-Leader has learned.

Late last year, members of Office and Professional Employees International Union Local 153, which represents 450 tellers, loan officers and collectors, were advised they had until Dec. 19 to opt into a buyout plan tied to their years of service with the 104-year-old credit union.

Get 16-20 Weeks’ Pay

The notice from MCU’s Human Resources Department stated that in order to receive the buyout, at least 30 percent of the members eligible had to sign up. They would receive from 16 to 20 weeks of base salary, depending on years of service.

Neither the union nor the MCU returned calls to confirm whether the closings and workforce reductions were going to take place.

The memo indicated the branches slated for closing Jan. 20 are in Coney Island, East Meadow, Melville, Oceanside and Yonkers.

Credit unions, unlike commercial banks, are not-for-profit cooperatives that are owned by members linked by community or workplace affiliation. The MCU was founded in 1916 for city civil servants.

Easy Credit Terms

“Yeah, I love the credit union,” said one NYPD officer, who said it gave him a loan to buy his uniform and other must-have equipment secured against only his promise of employment by the city. “You don’t see the Wall Street banks doing something like that.”

Last June, former MCU CEO Kam Wong was sentenced to 5 ½ years in prison for defrauding the MCU of almost $10 million. Joseph Guagliardo, a former MCU Supervisory Committee member, pleaded guilty Jan. 10 to embezzling $450,000 from the credit union over nine years.

An ongoing Southern District of New York investigation also resulted in the October arrest of State Supreme Court Justice Sylvia G. Ash, a former MCU board chairman.

Ms. Ash, who pleaded not guilty and is on paid leave from her job as the Presiding Judge of Brooklyn Supreme Court's Commercial Division, is accused of obstructing the probe into Mr. Wong’s crimes and improperly pocketing tens of thousands of dollars from the MCU to cover personal expenses.

Members Feel Shut Out

Last May, state regulators took over the $3-billion credit union and turned it over to the National Credit Union Administration for conservatorship. The NCUA insures credit-union depositors' accounts up to $250,000 and is the equivalent of the FDIC for credit unions.

Now, with word of the possible branch closings, members are expressing concern that the conservatorship has denied them any role in running the nonprofit in which they are shareholders.

“This is very upsetting,” said Robert J. Croghan, chairman of the Organization of Staff Analysts, a longtime MCU member and activist.

“I got no notification [of the branch closures] and I am one of the shareholders,” he said in a phone interview. “They just don’t bother communicating with us. They just go on plugging on with whatever they are doing, and there is no talk about going back to having it run by the average shareholder, and I get the distinct impression they are not interested in it.”

Other MCU members interviewed after banking at its lower-Manhattan branch also questioned the lack of involvement of shareholders.

Not Open Late Enough

“I am concerned because I don’t believe the branches are open late enough now,” said a member of District Council 37’s Local 768, who is a health-care worker in the public schools.

She said a friend had expressed interest in trying to run for the MCU board but was stymied by lack of information about the process prior to the takeover.

“They didn’t make it clear that you as a member could participate or how many meetings you would have to attend if you wanted to be involved that way,” she said.

Another MCU member, a manager for the Department of Finance, said he opted to use the credit union “to support the community and not traditional banks like Bank of America, J.P. Morgan or Chase.”

The NCUA said in a statement, that it "has made no decisions about the long-term future of the credit union; however, continued service to members is a priority." 

A spokeswoman for the state Department of Financial Services said DFS was "actively engaged with NCUA on activities related to MCU, including joint examinations of the credit union, to ensure the protection of MCU members."

At least one expert was critical of the state’s decision to place the MCU in the hands of the NCUA, without the engagement of credit-union members.

A Premature Takeover?

Chip Filson, who worked for 40 years as a credit-union consultant and top official with the NCUA, said that based on MCU financial statements there was no “immediate financial safety and soundness issue” to justify the takeover.

“NCUA’s track record as a conservator is extremely mixed” and its “conservatorship of the two largest [corporate credit unions] and then takeover of three more in a mass liquidation process destroyed solvent institutions that according to NCUA’s own numbers today have estate surpluses of over $5.6 billion, of which $3.1 has been transferred into the NCUSIF [National Credit Union Share Insurance Fund],” he stated.

“By setting itself up to run a credit union as a conservator,” Mr. Filson continued, “NCUA has a conflict of interest. Does it act in the members’ best interests or does it act in its own self-interest? As in all conservatorships, the members have no voice.”

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(1) comment

PAPA Cable

Not surprise of that MCU is closing down several of its branches. Their has been corrupt leadership at all levels taking money for private use and people Like myself getting less and less In interest for their dollar just like regular banks. On top of this the BIG picture is GOVT and BIG Business are strategically taking powers away from the low and middle income and doing a full scale Gentrification of the entire system. Civil service reduce to peanuts if any at all, laws protecting working class and poor are presently against one another And the winner will be wealthy. This a long term process but sped up as each day passes! Recognize the current state of decisions!

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