The NCUA announced the liquidation of the tiny $55,000Bagumbayan Credit Union in Chicago on Tuesday evening.

The NCUA, along with the approval of the Illinois Department ofFinancial and Professional Regulation, made the decision toliquidate Bagumbayan and suspend its operations. The $626 millionGreat Lakes Credit Union in North Chicago, Ill., immediatelyassumed Bagumbayan's members and deposits.

Great Lakes Credit Union had been operating Bagumbayan under a management agreement with the NCUA since thefederally insured, state-chartered credit union was placed intoconservatorship in December of last year.

In October 2013, Bagumbayan consented to acease-and-desist order fromthe NCUA that revealed shortcomings in internal controls.The actions requiredby the order included:

• Cease and desist allowing unapproved officials to attend boardmeetings, serve on committees, or perform any and all managerialfunctions, operational functions, or both.
• Refrain from implementing any aspects of a proposed businessplan involving the establishment of new lines of business,including money remittance services.
• Resolve all recordkeeping issues and Bank Secrecy Actviolations detailed in exam reports.
• Ensure secure storage and transmission of all member dataconsistent with the NCUA's Rules and Regulations for safeguardingmember information.
• Comply with all lawful directives of the state regulator,including all elements of the suspension order issued by thatagency.

In 2012, Bagumbayan was issued three suspension orders by theIllinois Department of Financial & Professional Regulation.

Bagumbayan is the first federally insured credit unionliquidated in 2014.

Chartered in 1964, Bagumbayan served 44 members and had assetsof $55,140 at the time of the liquidation and subsequent purchaseby Great Lakes Credit Union.

Bagumbayan's net worth slipped below 7% to 6.97% as of September30, 2013. As of Dec. 31, 2012, Bagumbayan's net worth was areported 12.63%, but gradually dropped each quarter of 2013. Thecredit union charged off 46.28% of its loans in the second quarterof 2013 and another 20.98% in the third quarter.