The NCUA on Monday retained $ 3 million Empire Financial Federal Credit Union, which managed unsecured loans, mostly Paycheck Protection Program loans, totaling $ 1,634,968 in 2020, compared to just $ 54,171 in unsecured loans in 2019. .

The independent federal agency said it had retained the Jackson, New Jersey-based credit union due to unsafe and inappropriate practices that were not specified.

Gerald Goldenbroit, who was the president / CEO of the credit union for almost nine years and also worked as an NCUA examiner for 18 years, said there were no safety and soundness issues at Empire Financial.

He said when he received a notice of NCUA trusteeship on Monday, he was “totally appalled”.

“I believe the facts will confirm to me that the actions that were taken by the NCUA were totally unwarranted,” Goldenbroit said when meeting with CU time Tuesday. He has declined further comments at this time.

The NCUA said in a prepared statement that member services will continue uninterrupted by appointment at the credit union’s new location at 22 Cortlandt St. in Manhattan.

This address is the same office building, in the heart of Wall Street, of another preserved financial co-op, the $ 4.1 billion municipal credit union. According to the NCUA, Empire Financial’s new temporary location for member services is closer to the main FOM and the Cortlandt Street office building had office space.

Empire Financial’s December 2020 appeal report listed 52 unsecured loans / lines of credit, which primarily included SBA PPP loans over $ 1.6 million. The credit union charged an interest rate of 10% on these loans.

While Empire Financial’s loan income grew from $ 24,164 in 2019 to $ 43,803 in 2020, its fee income soared from $ 58,787 to $ 243,363 in 2020, according to NCUA financial performance reports. The New Jersey Credit Union also listed $ 2,212,725 as its total borrowing under the PPP loan facility, its December 2020 appeal report showed.

As of the end of the first quarter of 2021, Empire Financial listed 41 unsecured loans, including SBA PPP loans, valued at $ 1,243,711. The credit union was charging an interest rate of 3.50% on these loans, according to its appeal report. Empire Financial’s loan income at the end of the first quarter of this year was $ 29,366, compared to $ 9,169 at the end of the first quarter of 2020, while its fee income increased from $ 322 to first quarter of 2020 to over $ 60,000 in the first quarter of 2021..

Empire Financial also recorded $ 1,208,965 in total borrowings under the PPP loan facility, its appeal report said.

Empire Financial ended 2020 with a gain of almost $ 144,000, compared to a loss of $ 21,000 at the end of 2019. At the end of the first quarter of this year, the credit union recorded a gain of 52,349 $ compared to a loss of $ 10,371 at the end of 2020. first quarter, according to NCUA financial performance reports.

In March 2020, the credit union posted a net worth of 2.43% while in March 2021, its net worth soared to 9.72%.

Licensed in 1976, Empire Financial served 343 members.