BUSINESS NEWS MAY 17, 2019 / 5:13 PM / UPDATED AN HOUR AGO

New York seizes state's oldest credit union after ex-CEO's embezzlement plea

Jonathan Stempel
2 MIN READ

NEW YORK (Reuters) - New York’s top financial regulator on Friday seized the state’s oldest credit union, Municipal Credit Union, saying it suffered from “unsafe and unsound” conditions after its former chief executive pleaded guilty to embezzlement.

The seizure by New York’s Department of Financial Services followed Kam Wong’s guilty plea last Nov. 19 in federal court to embezzling millions of dollars from the Manhattan-based credit union, which he led from 2007 to 2018.

Linda Lacewell, the state’s acting financial services superintendent, said her office appointed the National Credit Union Administration as the credit union’s conservator.

She said the regulators will work to ensure that members’ funds are protected and services continue uninterrupted.

Municipal Credit Union said it was founded in 1916 after New York City Mayor John Purroy Mitchel said city employees should be able to save at reasonable rates, and also borrow without paying the high interest rates demanded by loan sharks.

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