State Regulators Close Pittsboro Credit Union
Posted February 15, 2005 4:41 a.m. EST
PITTSBORO, N.C. — State regulators shut down a credit union in Pittsboro because of undisclosed accounting irregularities.
The closure stunned members of Chatham-Lee Credit Union as they lost a long-standing neighborhood lender. When asked whether he was concerned about losing his money, Credit Union member James Lee said, "I sure was. I was out of work."
Stunned credit union members with less than $5,000 invested walked out with checks. Those with more were promised the rest within a few weeks.
"There was not a lot of notice. It was based on some accounting concerns and so, it was rather quick," said State Credit Union Division Deputy Administrator Tony Knox.
Knox would not elaborate on the accounting problems regulators found. Manager Jimmy Leach, who lives next door to the credit union, resigned when confronted with the news. WRAL was not able to reach him for comment.
The credit union had served Pittsboro's African-American neighborhood for nearly 50 years when other institutions would not.
"I just felt sick. I was heartsick because I hated to see it go down because it's been a big help to us," credit union member Alean Brooks said.
"It's been a close-knit community that's been served and this is difficult for me. This is sad to have to be the one to do this," Knox said.
Credit union accounts were frozen for two weeks, but the money is protected by federal insurance. Regulators say this case is the first time they can remember that the state actually stepped in to a credit union. The FBI is also involved with the investigation.