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Charleston credit union founded by civil rights icon is taken over

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CO Federal Credit Union

Charleston-based CO Federal Credit Union was placed into conservatorship by regulators this week. John McDermott/Staff

A member-owned lending cooperative co-founded by Charleston civil rights activist Esau Jenkins in the 1960s to serve poor minorities has been taken over by regulators over unsafe and unsound practices.

The National Credit Union Administration said it placed CO Federal Credit Union into conservatorship Monday. Deposits of up to $250,000 are insured and protected for individual and joint accounts. 

Under a conservatorship, the independent federal agency is now running CO Federal to ensure its financial stability.

"While continuing normal member services, the NCUA will work to resolve issues affecting the credit union’s operations," according to a written statement.

The administration added that it "has made no decisions about the long-term future" of CO Federal. 

In its latest financing filings, the credit union reported loans and other assets totaling about $4.5 million. It lost more than $37,000 through the first nine months of last year, compared with net income of about $81,000 during the same period of 2019, according to the most recent data filed with government regulators.

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CO Federal's estimated 785 members — who include the Citizen Committee of Charleston County and waterfront workers who belong to the International Longshoreman’s Association Local #1422— "can continue to conduct normal financial transactions, deposit and access funds, and make loan payments," the NCUA said.

The small financial institution's office, which operates four days a week, is on Spring Street, near the Rutledge Avenue intersection.

Jenkins, a Johns Island native who spent much of his adult life seeking to lift the local Black community out of poverty, set up CO Federal on Cannon Street in 1966 with some partners as a resource for low-income minorities who were being denied loans and access to other conventional financial services. He also served as its president.

The lender originally based its name on the initials for Community Organization, an advocacy group that Jenkins also established, though it now stands for Community Owned. Its motto is, "Not for profit, not for charity, but for service."

According to its website, CO Federal is one of two designated low-income credit unions in South Carolina. It said it has provided loans totaling more than $10 million since it opened its doors.

The last time the NCUA placed a Charleston-area lender into conservatorship was in 2008, when it seized and sold the insolvent Port Trust Federal Credit Union in West Ashley. 

Contact John McDermott at 843-937-5572 or follow him on Twitter at @byjohnmcdermott

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