Markets Wired

ALEXANDRIA, Va. (Jan. 20, 2016) – Internet Archive Federal Credit Union, of New Brunswick, New Jersey, today paid all shares insured by the National Credit Union Administration in full to members of record as part of its voluntary liquidation.

NCUA initiated cease-and-desist order proceedings on Nov. 24, 2015 in order to prevent the credit union from committing unsafe and unsound practices and violations of law, rule, and regulation. Upon the recommendation of the credit union’s board of directors, the membership of Internet Archive Federal Credit Union voted to voluntarily liquidate on Dec. 8, 2015. NCUA regulations required the credit union to then provide NCUA with a plan for its voluntary liquidation. NCUA approved the voluntary liquidation plan on Jan. 6, 2016, and cease-and-desist proceedings were abated in anticipation of the credit union’s share distribution to members.

The temporary cease-and-desist order identified the credit union’s failure to correct ongoing deficiencies since it was chartered, including:

• Unwillingness to open accounts within the field of membership, make loans, and establish operations in the low-income community where the credit union was chartered to serve;
• Violations of the Bank Secrecy Act and USA PATRIOT Act; and
• Weakening financial conditions and mounting losses.

The temporary cease and desist order required the credit union take certain actions, including:

• Develop and implement a marketing plan targeting the field of membership the credit union was chartered to serve: New Brunswick and Highland Park, New Jersey;
• Provide annual, formal Bank Secrecy Act training for all staff and officials;
• Engage a qualified, independent third party to conduct Bank Secrecy Act compliance program testing and report the results of that testing to the credit union’s board of directors;
• Develop a system of internal controls to ensure ongoing compliance with laws and regulations related to the Bank Secrecy Act, anti-money laundering and Office of Foreign Assets Control regulations;
• Develop and implement an adequate customer identification program to verify the credit union knows the identity of any person applying for membership;
• Cease all online account opening activity until a customer identification program has been developed in accordance with federal law, approved by NCUA’s Region II Director and implemented;
• Ensure that lists of subjects and businesses periodically published by the Financial Crimes Enforcement Network are cross-checked against the credit union’s membership records; and
• Develop and implement a written strategic business plan and budget directed at reversing the ongoing deterioration of net worth and earnings in order to avoid Prompt Corrective Action.

Chartered in 2012, Internet Archive Federal Credit Union had assets of $2.25 million and served 391 members, according to the credit union’s most recent Call Report.