Members Want Out Of CNMI Government Credit Union

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Delinquent member loans complicate withdrawal requests

By Moneth Deposa

SAIPAN, CNMI (Saipan Tribune, May 8, 2013) – A large number of members of the Northern Marianas’ Commonwealth Government Employees Credit Union now want to terminate their membership with the organization.

Press secretary Angel A. Demapan confirmed with Saipan Tribune yesterday that about 300 members have pending requests to withdraw their contributions from the union.

Once these refunds are released, these government employees will no longer be connected with the union and can't avail of any of its benefits.

The credit union is a member-owned, nonprofit cooperative financial institution where members pool their savings, lend them to one another, and own the organization where they save, borrow, and obtain related financial services.

Since last year, most of its members have applied for refunds and are waiting for the release of their monies. Withdrawals were earlier suspended by the union board pending the completion of an audit. It was found that the organization has never had any audit since 2008.

At this point, there is no telling how much is actually on the union's account where the refunds will be taken from and if the union is capable of paying all its withdrawing members.

Demapan said yesterday that the union's biggest challenge right now is the huge amount of delinquent loans by its members, which totals some $575,000.

"There are about 300 members who have pending withdrawal requests. The bigger challenge, though, for the credit union is that there are members with delinquent loans," said Demapan.

As for the audit, he disclosed that it will soon be over as it is slated for completion in three months. The audit began in February this year.

"We are currently in the third month, so we are awaiting word from the auditors on the actual date of completion," he said.

Union members interviewed by Saipan Tribune claim that the audit is only a ploy to delay the issuance of their refunds. They worry that the union's account may be empty and they will not be able to reclaim their contributions.

Demapan said the audit is not being used as an excuse on this matter.

"The audit is not an excuse. It is a measure that the board, upon assuming office in June of last year and reviewing the records of the credit union, found that no audit had been done on the institution since 2008. In an effort to ensure that full accountability was in place before the board takes major actions at the CGECU, the board actively sought the assistance of the Office of the Public Auditor to undertake an updated audit of its books," he said.

While it has been a long wait for union members, Demapan said the audit is nearing its end and is expected to be completed "very soon." Once completed, the board and the credit union will be able to have a comprehensive report to work on as it takes necessary action to entertain the needs of its members, he added.

"While I cannot disclose how much funds is currently in the credit union, it is not empty, as some alleged. The CGECU, although autonomous from the central government, is working closely with the administration to explore viable options to act on pending withdrawal requests from members dating back to the term of the previous boards," he added.

Demapan said the union thanks its members for being patient over the past few months and assures that it is undertaking every effort to ensure full accountability is in place before taking further actions.

The CGECU is not funded by the central government. It is sustained by members' deposits and loan payments. When it is formed in 1995 through legislation, it was authorized to borrow up to $2 million from the NMI Retirement Fund.

Due to a decline in its membership and some funding challenges that affected its operation, the union sought refinancing with the Fund last year. This was disapproved.

The Fund later filed a complaint in the U.S. district court seeking payment for the union's outstanding loan, amounting to $1.8 million. The case is pending.

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