Vegas NAACP credit union closed by feds, sold to San Diego operator

Tuesday, Aug. 15, 2000 | 10:47 a.m.

The credit union that serves the Las Vegas branch of the National Association for the Advancement of Colored People has been declared insolvent and sold to a San Diego-based international credit union.

Regulators with the National Credit Union Administration on Monday said the Westside Federal Credit Union, 1100 N. Martin Luther King Blvd., was taken over June 30 by the United Services of America Federal Credit Union.

The transfer was approved by the NCUA and members of Westside's board of directors. The operation will be called the USA Federal Credit Union Westside Branch.

Terms of the acquisition were not disclosed.

The Westside credit union has 3,856 members and all share accounts and loans were transferred to the San Diego operation.

Supporters of the takeover say the move will offer members services they haven't had before. Critics say it relinquishes local control and that members haven't been told about the events leading to the takeover.

One credit union member, who spoke on the condition of not being identified, said a $300,000 embezzlement led to the credit union's insolvency. No arrests have been made and the National Credit Union Administration had no comment about an investigation into the disappearance of the money. Members of the credit union's board of directors could not be reached for comment.

A spokeswoman for the NCUA said credit union insolvencies are rare. The agency examines the books of credit unions every 12 to 18 months to assess their financial health.

Spokeswoman Elizabeth Wirick said she could not disclose the circumstances leading to the insolvency of Westside, which has been in operation since 1951 and has grown to an asset base of $3 million.

Wirick said credit union accounts are insured and were automatically transferred to the new operator, known as USA Federal Credit Union.

Credit unions are nonprofit cooperatives that serve a specific organization, employment group or business. Westside served the 2,800-member Las Vegas NAACP branch.

Gene Collins, president of the NAACP-Las Vegas branch, said the takeover by USA Federal would be a positive thing for his organization because it will enable members to apply for automatic teller machine access and credit cards, which haven't been offered by Westside.

"Hopefully, what this will do is increase our productivity and membership," Collins said. "It won't change how the NAACP does business in the community."

USA Federal has branch offices in Japan, Korea, Guam, California and Nevada. The credit union already has one Las Vegas branch at 2790 E. Flamingo Road.

Formed in 1953, USA Federal has more than 50,000 members with an asset base of more than $366 million. The credit union has a base of military, civil service and civilian membership groups.

Meanwhile, a vocal critic of the change in operation says all the services that will be offered by USA Federal won't make up for the loss of local control.

"If I would have wanted debit cards and credit cards and ATMs, I could have opened an account at Wells Fargo," said Chester Richardson, a credit union member who works in casino surveillance and has lived in Nevada 20 years.

"I joined the Westside Credit Union because I felt I was a part of the ownership," said Richardson, a Republican candidate for the District 7 Assembly seat held by Morse Arberry.

Richardson said a decentralized credit union takes ownership away from local residents. He said he was outraged that members have had to learn about the acquisition by reading about it in a newspaper. He said members should have been informed about what was happening before operations were shifted to USA Federal.

"This has been the oldest black-controlled and owned (financial) institution in Las Vegas, founded by (the Rev.) Woodrow Wilson," Richardson said. "I think the (credit union) board has done a disservice to members by allowing this to be controlled from out of state without looking to local resources first."