Interim Manager Shawn Wilson of Greater Kinston Credit Union is working to pull the financial institution out of conservatorship — a status into which it was ordered by the state on Feb. 5, 2012.
Wilson, who was asked by GKCU President Jim Blaine to serve in the interim position beginning Feb. 1,was previously working as the senior financial services officer at State Employees Credit Union on Vernon Avenue.
“My first goal isto exit the conservatorship with Greater Kinston Credit Union,” he said about helping the credit union change its status.
GKCU will be holding a community meeting from 6 to 7 p.m. May 30 at St. Peter Church of Christ, 602 J.P. Harrison Blvd., to provide an update on its financial condition.
“(GKCU is) open for business, making loans, is part of the community,” said Rose Conner, administrator for the N.C. Credit Union Division, under the Department of Commerce.
Following a state investigation in 2012, the GKCU branch in New Bernwas closed, and the Kinston CEO, Jennifer Howard, and board were replaced by the management of Self-Help Credit Union early that year.
The former board members immediately appealed the conservatorship placed on GKCU by the Division. The N.C. Credit Union administrator ordered continuing the conservatorship in April 2012.
The board appealed a second time and administrator at the time, Jerrie K. Jay, upheld the former position.
Early this year, Self-Help took over another credit union in the state, and SECU and Wilson began managing GKCU.
The memorandum of decision and final order states the examinations “revealed a system of lending money which concealed the delinquent nature of loans to related third parties, including the Greater Kinston Community Development Center (the‘CDC’) and the Kinston Charter Academy (the ‘KCA’).”
GKCU’s outstanding loans totaled about $701,000 with a potential loss of $1.3 million.
Dependent on grants, it was lending money it didn’t have to the CDC — and GKCU and the CDC shared six board members, based on a forensic report performed by the accounting firm Dixon Hughes Goodman, the order states.
GKCU made contributions of $657,428 to the named nonprofits and disbursed $135,000 to the CDC. Using those funds, the CDC turned right around that same day and made a loan payment of about $93,291.
CKCU was also paying both nonprofits’ operating expenses, and the funds were eventually written off.
Since the state takeover, the credit union has been operating normally with day to day transactions, both Conner and Wilson said. But the last time it was making money was in 2010, Conner said.
“As of March 31, the credit union has a net worth of over 9 percent,” she said. “But it did lose money. The plan for the credit unionis to generate loans so the credit union can return to its earning status.”
Now, the state and SECU would like GKCU to rise from the ashes.
“We want to have a strong, healthy financial institution,” Conner said.
Wilson, a Kinston native, graduated from Onslow Christian Academy and earned a business degree at Mount Olive College.
The 26-year-old said he likes helping people, and had aspired to be a preacher, teacher or social worker.
“I’ve always been people-helping-people,” he said. “In this field, I get to help people financially.”
GKCU, in existence since 1952, has a predominantly African-American membership, and its mission is to help people with high-interest loans reduce the interest by as much as half and reduce monthly payments, Wilson said.
Membership is open to people living, working or worshiping in Lenoir, Greene, Jones and Craven counties. Current membership is at its highest, about 5,700. Free financial counseling is available.
The state will continue to evaluate the credit union until it re-grows its loans and can be released from conservatorship.
Margaret Fisher can be reached at 252-559-1082 or Margaret.Fisher@Kinston.com. Follow her on Twitter @MargaretFishr.
To Know More
Greater Kinston Credit Union is holding a community meeting, open to the public, from 6 to 7 p.m. May 30 at St. Peter Church of Christ, 602 J.P. Harrison Blvd.