TUSCALOOSA, Ala.—A judge has denied an attempt by Alabama One Credit Union to get a temporary restraining order against the state regulator, which has ordered changes in the CU’s management, among other things.
Alabama One was seeking the restraining order to thwart demands made in an April 2 cease-and-desist order that requires it to replace its CEO and other members of senior management, to change a number of practices, and to have its board go through certain training, in addition to other requirements.
Tuscaloosa County Circuit Judge John England has denied the temporary restraining order, but has also agreed to hear on Monday the credit union arguments for a preliminary injunction, according to the Tuscaloosa News. The Alabama Credit Unoin Administration wants botht he temporary restraining order and a request for a preliminary injunction to be dismissed, arguing that an ACUA law judge will be hearing Alabama One’s appeal of the cease-and-desist on June 9 in Montgomery, Ala.
In late April Alabama One filed suit against the ACUA and Administrator Sarah Moore, arguing that she did not have the authority to issue the order as Moore was never was sworn in as administrator and the state did not post a $25,000 bond required for someone holding the post.
CUToday.info review of the cease-and-desist order found the following:
- That the regulator had found, and the board had consented, that the credit union had engaged in “unsafe and unsound practices and violations of law, rule or regulation, have committed fraudulent or questionable practices in the conduct of the credit union’s business and have violated conditions imposed in writing by the Administrator.
- That the credit union has been operating with a board of directors that has failed to provide adequate supervision over and direction to the management of the credit union…and has failed co comply with directives from the regulator.
- That the credit union has been operating with management that has failed to demonstrate the ability to correct problems and implement appropriate risk-management practices.
That it has operated without proper expertise, policies and procedures over its member business loan portfolio.
* That is has granted, renewed and extended loans, mortgages or otherwise, to members disguised as straw borrowers.
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