State banking regulators on Thursday seized a 65-year-old Bloomfield credit union struggling under weak lending practices and internal controls.
The state banking department took control of South End Mutual Benefit Association and named the federal insurer for credit union deposits as the receiver of deposits and $2.5 million in assets, Banking Commissioner Howard Pitkin said.
Its 360 members’ accounts are insured up to $250,000 by the National Credit Union Administration.
Pitkin said his office took action after discussions with South End Mutual’s management revealed it was having difficulty satisfying regulatory requirements. The institution also was unable to fully correct problems with its credit administration, lending practices, internal controls and audit, he said.
South End Mutual opened in 1945, serving the Hartford area.
It is the first financial institution seized by state regulators this year and the first since the state’s December 2008 seizure of former West Hartford Credit Union in Farmington.
