Credit union seized, closed
Port Trust not solvent, regulators say; depositors should get money back soon
BY JOHN P. McDERMOTT
The Post and Courier
Port Trust Federal Credit Union at 2000 Sam Rittenberg Blvd. in West Ashley has been closed by the National Credit Union Administration, a federal agency.
The federal government has shut down and seized a small Charleston credit union, saying the financial institution was insolvent and will not reopen.
Depositors who can verify their accounts at the 2-year-old Port Trust Federal Credit Union are expected to get their money back quickly, according to the National Credit Union Administration, which regulates the industry.
The NCUA, a federal agency, said in a statement that it would issue checks to account holders within a week to 10 days. All deposits are insured to at least $100,000 on regular accounts and $250,000 on certain retirement accounts, the administration said.
Port Trust had about 260 members and $460,915 in assets, making it one of the smallest credit unions in the state. Its only branch was at 2000 Sam Rittenberg Blvd.
The takeover marks the first time the government has seized a regulated local lending institution since the summer of 1992, when Cooper River Federal Savings & Loan and Citadel Federal Savings Bank failed.
A group representing South Carolina's credit union industry described Port Trust's shutdown as an aberration.
In a statement issued late Tuesday, the NCUA said it decided to liquidate the West Ashley lender "and discontinue its independent operations after determining that the credit union is insolvent. It has no prospects for restoring viable operations."
"The liabilities outweighed the assets," said Cherie Umbel, spokeswoman for the Alexandria, Va.-based agency.
The outstanding loans at Port Trust will be sold. Borrowers should continue to make their monthly payments, Umbel said.
A woman who answered the telephone at Port Trust's office Tuesday night referred questions to Calvin B. Glover, a onetime Charleston City Council candidate who started the credit union in 2006. He could not be reached.
At mid-morning Wednesday, representatives of the NCUA's Asset Management and Assistance Center were working inside the locked branch in Harrell Square, near Citadel Mall. A letter taped to the front door said Port Trust depositors will be contacted within 10 days.
An employee of the assistance center said Wednesday that she was not authorized to answer questions about the closing.
The Rev. William Alston, a Port Trust board member and the mayor of Awendaw, would say only that a board meeting was scheduled for today. Awendaw had about $52,000 deposited with Port Trust as of Feb. 29, according to town records.
The NCUA issued a charter for Port Trust in 2006 "to serve persons who live, work, worship, attend school in, and businesses and other legal entities located in a community within Charleston and North Charleston, South Carolina."
The closing was not a complete surprise, according to the South Carolina Credit Union League, a Columbia-based trade association that represents the roughly 80 credit unions around the state.
"This one has been on the watch list ... for the NCUA," said Steve Fowler, the group's executive vice president. He said regulators likely swooped in on Port Trust after determining that the lender could not maintain adequate reserves against potential loan losses.
The NCUA requires credit unions to retain at least 7 percent of their equity, or capital, based on total assets. As of June 30, the equity-to-assets ratio for Port Trust was barely above 1 percent, according to a report on the agency's Web site.
Fowler noted that Port Trust was set up as a nonprofit organization, which prohibited it from raising capital by selling shares. Instead it had to rely on earnings to build up its cushion, but the credit union was not profitable.
Fowler described Port Trust's demise as "definitely an isolated case."
Glover, a Columbia native, was president and chief executive officer of Port Trust, according to the NCUA.
Before opening the credit union, he worked in the radiology department at Roper Hospital, according to a biography posted on the Web site of the Charleston County Housing & Redevelopment Authority, where his five-year term as a commissioner was to expire last month.
Previously, Glover was employed by retailer Auto Zone, making $1,500 a month, according to a document included in his 2001 personal bankruptcy filing.
Despite its founder's past financial troubles, Port Trust became the first startup credit union in the Charleston region to earn a charter from the NCUA since the mid-1960s.
Two years ago, Glover said in an interview that his goal was to amass $5 million in assets by the end of 2006 and $60 million within five years.
He also mentioned plans to open a North Charleston branch, with one or two others to follow later.
Glover, who made an unsuccessful run for Charleston City Council in 2002, previously tried to establish a credit union in the 1990s. "My timing wasn't right," he said in 2006.
Jessica Johnson of The Post and Courier contributed to this report. Reach John P. McDermott at 937-5572 or at jmcdermott@postandcourier.com.
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whome (anonymous) says...
Wow. $460K in assets, but about 1% of the 7% capital requirement... A couple of questions which would illuminate the situation.
1. Was the insolvency a result of a bank run, non-performing assets, or just plain old co-mingling? My guest is on the last option.
2. How much is this costing the NCUA?
3. HOW THE HELL did the NCUA let an individual with apparently no banking experience, and a bankruptcy on his record, open a credit union?
August 7, 2008 at 12:50 a.m. ( permalink | suggest removal )
moonpie (anonymous) says...
WHOME's number 3 is the kicker. Worked at an Auto Zone and that was his experience?
From the sounds of it I bet he's a black dude and you know we have to tread lightly and give them what they want. I'm sure there was some gov grants and money supplied in the startup? And here we go...
August 7, 2008 at 6:25 a.m. ( permalink | suggest removal )
Tammie (anonymous) says...
Moonpie, tread lightly and give "them" what "they" want? I want winning damn lottery numbers. How bout you tread lightly and give me those? You make some of the most ignorant azz comments 99.5% of the damn time. As if no one else of a different ethnicity can get government grants. Get a damn clue.
And the "no I'm not a racist..." "Go Obama..." phuckery can't save you on this one.
August 7, 2008 at 11:22 a.m. ( permalink | suggest removal )
justbeingme (anonymous) says...
I don't respond to most of the comments made on some of the articles because I'm too busy either laughing or curious of the mindset of some of the folks that do respond.
MOONPIE..I read and sought reasons of why this credit union was established but I did not go as far as to think that "I bet he's a black dude and you know we have to tread lightly and give them what they want". People take chances, have visions or dreams...and actually go for it. You could have done the same thing--with the same results. Why did Cooper River Federal Savings & Loan and Citadel Federal Savings banks fail? Could it have been that some "good ole boys got what they wanted"?
August 7, 2008 at 11:30 a.m. ( permalink | suggest removal )
Tammie (anonymous) says...
Justbeingme, with Moonpie, you do have to wander her mindset. She doesnt think she's a racist, yet look at what she types. In her world, population 1, she's, as she told me, "Far from being a racist."
Riiiiight.
August 7, 2008 at 11:33 a.m. ( permalink | suggest removal )
justbeingme (anonymous) says...
I would love to have Moonpie over for dinner with some Whites, Blacks, Indians, Latinos & Chinese folks...
August 7, 2008 at 11:39 a.m. ( permalink | suggest removal )
Oceanlover (anonymous) says...
Moonpie, you are an idiot. And a racist idiot to boot. And as we all know, idiocy does not discriminate.
August 7, 2008 at noon ( permalink | suggest removal )
UnoCubanito (anonymous) says...
So Moonpie what would you say the color the other Credit Union that were closed in July in New London, Connecticut, Meriden F. A. Federal Credit Union of Meriden, Connecticut,New Mexico and California since your about the race of a person. A number of small and big credit unions are being shut down during the month of July and now reason of loan losses etc.. Give people loans don't make the payment etc and that credit union can't float back when you have not much in assets to stay alive.
August 7, 2008 at 12:11 p.m. ( permalink | suggest removal )
Neponset (anonymous) says...
I think I will stay out of this one - seems to be a racially charged issue.
August 7, 2008 at 1:44 p.m. ( permalink | suggest removal )
Tammie (anonymous) says...
Neponset, it's not racially charged. You know who always has "ignant" things to say. 'Tis all.
August 7, 2008 at 1:46 p.m. ( permalink | suggest removal )
Lovely_One (anonymous) says...
Wow, what did I walk into? I don't know why you guys are wasting your keystrokes on moonpie, she will only respond with "I am not racist...blah, blah, blah...I know black people....blah, blah, blah." So, I just leave her to her own little "non-racist" rants. Oh, and she won't respond to any of you until she feels that the coast is clear or until some other person that shares her views steps into the conversation.
Just pay attention and you will see. It's actually funny to watch!
August 7, 2008 at 2:25 p.m. ( permalink | suggest removal )
Neponset (anonymous) says...
Tammie
My above comment was a little trollish - sorry.
August 7, 2008 at 2:27 p.m. ( permalink | suggest removal )
Tammie (anonymous) says...
Neponset, all good.
August 7, 2008 at 2:30 p.m. ( permalink | suggest removal )
Tammie (anonymous) says...
Lmao @ Lovely!
August 7, 2008 at 2:31 p.m. ( permalink | suggest removal )
Lovely_One (anonymous) says...
Neponset, not trollish at all. The 2nd comment of the day made this a racially charged discussion. That comment was not called for, but it is an opinion board and if that is her opinion she has the right to post it.
Tammie, what I do?
August 7, 2008 at 2:35 p.m. ( permalink | suggest removal )
Girleygirl (anonymous) says...
Moonpie is a closet racist...she says little things and then run into the corner to say "she's not a racist and everyone thinks the same thing."
Very closed mind little girl that reads but can't comprehend a darn thing she saw. At first I thought no one could be so stupid but she likes living in that ignorant hole she calls a mind.
Lovely- she won't respond because she is the troll and like starting racial charged articles. She is no better than Jesse Jackson and his race baiting....she can't stand black folks but she sure is brown nosing up his tail by doing the EXACT thing he does!
August 7, 2008 at 3:02 p.m. ( permalink | suggest removal )
Lovely_One (anonymous) says...
Girleygirl, you know the reference to JJ is dead on. The only difference is that he does his out in the open and not on some anonymous newspaper forum where no one really knows who he is.
August 7, 2008 at 3:08 p.m. ( permalink | suggest removal )
redman1959 (anonymous) says...
Holy Cr_p!!! I'm going to go open a bank. He made $1500 an month at Auto Zone and had a bankruptcy in 2001? My God!!, with a foreclosure a bank won't even look at you for 7 years and this guy opens a credit union? Whaaaaaaaaaat?
August 8, 2008 at 2:26 p.m. ( permalink | suggest removal )
NoMoreLies (anonymous) says...
God is truly AWESOME! Unfortunately, I and a former Mayor helped Mr. Glover get the Credit Union after the NCUA turned him down. After he received the chapter, he turned his back on the two of us and gave us no credit. Just like the failed Insurance business he managed in the past, he had absolutely no experience to run a Credit Union and the Executive's of the NCUA should have known this from the very beginning. Mr. Glover was suppose to hire a professional staff, but decided to make his self the Chief and Indian. NCUA should investigate if he co-mingled funds while they are at it! Calvin how does the bottom feel to you, now?
August 8, 2008 at 10:51 p.m. ( permalink | suggest removal )
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