2020-11-16T15:21:54-06:00 2019-12-31 BDO USA LLP 330 N Wabash Suite 3200 CHICAGO IL 60611 990 2019-01-01 135261470 Municipal Credit Union % JANE E DOBBS MUNI 2122383334 22 Cortlandt St 26th Flr New York NY 10007 JANE E DOBBS CEO 2122383334 2020-11-15 true Jacob Cook P01240455 3128569100 174.82.231.237 36189620203215000135 2020-11-16 P 5A87CDB628F42FEBEB468B67B291677CC8A0A888 AAA3540577B3B617C177EF20D3BFFC53CE7B5F7A 2019 2022-01-07 14:23:13Z JANE E DOBBS 22 Cortlandt St 26th Flr New York NY 10007 218495095 false X www.nymcu.org 1916 NY TO BUILD LIFETIME FINANCIAL RELATIONSHIPS WITH EACH MEMBER, PROVIDING COMPETITIVE PRODUCTS AND EXCELLENT SERVICES. 5 5 846 5 5160217 1162536 0 0 185345642 207994673 12871423 10500422 0 0 198217065 218495095 71000 0 0 0 82799594 162226573 0 0 0 104019086 138999967 186889680 301226540 11327385 -82731445 2863182574 3052270675 2753495301 2907293046 109687273 144977629 X To build lifetime financial relationships with each member, providing competitive products and excellent services. false false Founded in 1916 for New York City municipal workers, Municipal Credit Union (the Credit Union) is the oldest credit union in New York State and the largest Metro New York credit union offering a wide array of financial services to its members. MCU is chartered under New York State banking law. The Credit Union currently provides services to over 550,000 members and managers over $2.9 billion in member assets. Membership is available to employees of the City of New York and its agencies, employees of the federal and New York State governments in the five boroughs, employees of hospitals, nursing homes and similar facilities which are located within New York State, and others who are eligible as specified in the Credit Union's bylaws. false false false false false false false false false true true false false true false false false false false false false false false false false false false false true false false false false false false false false false false false false false false true 67292 0 true 846 true true true false false false false false false false X 5 5 false false false false true true true true true true true true true true true true true true false true false NY X JANE E DOBBS 2122383334 22 CORTLANDT ST New York NY 10007 X Mark A Ricca End 517 President/CEO 60.0 0.0 X 302885 0 0 Norman Kohn End 228 EVP/Chief Credit Officer 40.0 0.0 X 264229 0 0 Carlo A D'Angelo AVP/IT 40.0 0.0 X 190748 0 19000 Vishnu Kandhai AVP/IT 40.0 0.0 X 188230 0 5647 Richard Casamassa END EVP/Chief Member Service 40.0 0.0 X 189696 0 0 Sreenivas Rayadurgam Programming Mgr 40.0 0.0 X 185482 0 0 Stacy K Riley AVP/Risk Mgmt (END 11/7/19) 40.0 0.0 X 168455 0 14549 Ahmed Campbell VP Loan Ops (END 9/6/19) 40.0 0.0 X 181927 0 0 Shannon Mashburn End SVP, Chief HR Officer 60.0 0.0 X 175048 0 0 Carole Porter End 12 SVP/Chief Retail Banking 40.0 0.0 X 169175 0 400 Lisa M Mingoia End 5 SVP/CFO 60.0 0.0 X 110769 0 0 Gary Luvera NCUA DSA Board Administrator-See Sch O 1.0 0.0 X 0 0 0 Joe Norton NCUA PCO Board Administrator-See Sch O 1.0 0.0 X 0 0 0 John Kutchner Regiona Board Administrator-See Sch O 1.0 0.0 X 0 0 0 Michael Ryan Regional Board Administrator-See Sch O 1.0 0.0 X 0 0 0 Mara Kohn NCUA OGC Board Administrator-See Sch O 1.0 0.0 X 0 0 0 2126644 0 39596 60 false true false KPMG LLP PO BOX DALLAS TX 75312 ACCOUNTING SERVICES 4837887 ARNOLD PORTER KAYE SCHOLER LLP PO BOX 759451 BALTIMORE MD 21275 Legal Services 1835287 EPSTEIN BECKER GREEN PC 250 PARK AVE NEW YORK NY 10177 LEGAL SERVICES 1519579 P KAY WOODS PO BOX 2800-183 CAREFREE AZ 85377 CONSULTING 715500 DEBORAH ARNDELL DBA ARMOR ADVISORY 2154 COE HILL RD ONEONTA NY 13820 ARMOR SERVICES 672586 17 0 LOAN INTEREST 900099 119858952 119858952 FEES & SERVICE CHARGES 522100 77225613 76369299 856314 INSURANCE REIMBURSEMENT 522100 8884162 4580259 4303903 OTHER OPERATING INCOME 900099 2025946 2025946 207994673 10353843 10353843 0 0 0 0 0 100004 46575 100004 46575 146579 146579 0 0 0 0 0 0 0 0 0 0 218495095 202834456 5160217 10500422 0 0 0 0 1212202 0 0 0 0 42515816 102529683 12983211 2985661 0 5749719 0 0 0 0 16148374 2264881 14754424 6147103 0 12435998 220308 0 14464 0 0 12686910 999360 PROVISION FOR LOAN LOSS 32659470 DEBIT AND CREDIT CARD EXP 17223250 DIVIDEND EXPENSES 5286847 COLLECTIONS EXPENSES 3106359 9302500 301226540 0 0 0 97076867 77250979 405469691 689854784 0 0 10417067 8303573 0 0 0 0 1940319994 1901512000 0 0 50856437 62710495 41719509 20960469 28975568 20759040 0 0 265447839 196038539 6351025 6984221 0 0 58268086 88857044 2863182574 3052270675 65086210 71023995 0 0 0 3077952 0 0 0 0 0 0 0 0 0 0 2688409091 2833191099 2753495301 2907293046 X 0 0 0 0 109687273 144977629 109687273 144977629 2863182574 3052270675 X -82731445 64371 82688 117874742 X false false false 15171300 4762840 10408460 20258173 11493608 8764565 6290036 4704021 1586015 20759040 GOVT SECURITIY - LT 18661807 F CMO & MBS 74191324 F SBAS 103121037 F OTHER 64371 F 196038539 0 MEMBERSHIP ACCOUNTS 2833191099 2833191099 X false false X X X X false false false Ahmed Campbell VP Loan Ops (END 9/6/19) 159509 0 0 0 22418 0 0 0 0 0 181927 0 0 0 Richard Casamassa END 12319 EVP/Chief Member Service 33696 0 0 0 156000 0 0 0 0 0 189696 0 0 0 Carlo A D'Angelo AVP/IT 175748 0 15000 0 0 0 19000 0 0 0 209748 0 0 0 Vishnu Kandhai AVP/IT 173230 0 15000 0 0 0 5647 0 0 0 193877 0 0 0 Norman Kohn End 22819 EVP/Chief Credit Officer 79553 0 0 0 184676 0 0 0 0 0 264229 0 0 0 Shannon Mashburn End 72619 SVP, Chief HR Officer 163942 0 0 0 11106 0 0 0 0 0 175048 0 0 0 Carole Porter End 12319 SVP/Chief Retail Banking 30552 0 0 0 138623 0 400 0 0 0 169575 0 0 0 Sreenivas Rayadurgam Programming Mgr 185482 0 0 0 0 0 0 0 0 0 185482 0 0 0 Mark A Ricca End 51719 President/CEO 302885 0 0 0 0 0 0 0 0 0 302885 0 0 0 Stacy K Riley AVP/Risk Mgmt (END 11/7/19) 151492 0 425 0 16538 0 14549 0 0 0 183004 0 0 0 Schedule J, Part I, Line 1A: A Housing Allowance was received by Stacy K. Riley, AVP Risk Management, until her termination date. The amounts received were treated as taxable income to her. SCHEDULE J, PART I, LINE 1B: Written Reimbursement Policy The Credit Union did not have a written reimbursement policy in place for the expenses described in Part I, Line 1a. Form 990, Part IV, Line 12a: The Credit Union obtained separate, independent audited financial statements for the 18-Months ended June 30, 2019. The Credit Union also obtained separate, independent audited financial statements for the 12-Months ended June 30, 2020. The Reporting tax year for this tax filing of December 31, 2019 falls within the two periods for the audited financial statements. The organization intends to change its tax year to June 30th going forward to better align with audited financial statements. Form 990, Part VI, Section A, Line 1a/b: The governing body is currently made up of five representatives from the NCUA. There are three examiners and two regional directors. See note for Form 990, Part VII, Section A for additional detail. Form 990, Part VI, Section A, Line 5: As disclosed on its Form 990, for FYE 2017, the Credit Union discovered a significant diversion of assets in 2018, prior to the time that Form 990 was filed. Through its ongoing investigations throughout the tax period being reported on, the Credit Union has become aware of additional financial accounting improprieties. Beginning in June 2018, The Credit Union has been placed under the conservatorship of the National Credit Union Association. The Credit Union also has carried out a comprehensive reorganization, including terminating all individuals identified as having been involved in the misconduct, if employed, engaging new senior executive management team, retaining a new accounting firm, implementing additional internal accounting controls, and adopting new governance policies and procedures. Additionally, state officials removed the Board of Directors and Supervisory Committee members in place during the time the misconduct occurred. As described below, federal prosecutors also have instituted criminal action against a number of Credit Union representatives, resulting in prison terms for certain individuals, as well as the indictment of the former Chair of the Credit Union's Board of Directors. With respect to the embezzlement schemes, the Credit Union became aware prior to the filing of the 2018 tax return that certain Credit Union executives and other employees and representatives diverted assets through improper claims for business expense reimbursements, car allowance, long term disability insurance, dental expense reimbursements, personal leave, gift card purchases, petty cash requests, tax liability payments, and by entering into unauthorized contracts. With respect to the financial accounting improprieties, the Credit Union became aware prior to the filing of the 2018 tax return that certain former Credit Union executives having responsibility for accounting functions had improperly reported the Credit Union's investment income by failing to expense the premium on bonds payable, had improperly reported the Credit Union's loan origination expenses in order to positively manipulate the Credit Union's performance metrics, had engaged in improper accounting practices with respect to MCU's fixed assets, including underreporting and/or minimizing MCU's expenses, had used inaccurate information to inflate MCU's pension performance, and had improperly made loan modifications and/or deferments under the guise of member services. In addition to the comprehensive reorganization of its operations described above, the Credit Union has cooperated fully with criminal proceedings brought by the U.S. Attorney's Office for the Southern District of New York. In connection with those proceedings the Credit Union's former Chief Executive Officer has plead guilty to embezzling from the Credit Union and is now serving a federal prison sentence of sixty-six (66) months. As part of his guilty plea, he also agreed to forfeit at least $9,890,375. The former Supervisory Committee Chair and Head of the Security and Fraud Department also recently has pleaded guilty to embezzling more than $400,000 from the Credit Union, and prosecutors have recommended a prison sentence of more than two years. In addition, federal prosecutors have indicted the former Chair of the Credit Union's Board of Directors for obstructing the criminal investigation of the former CEO's embezzlement scheme. Her trial is presently set to begin on October 19, 2020. The Credit Union has sought insurance coverage from its Fidelity Bond Insurer for the losses discussed above. A lawsuit against that insurer is now pending in state court in Wisconsin. Form 990, Part VI, Section A, Line 6: The Credit Union is comprised of approximately 550,000 member owners, each of which has equal rights. To become a member of Municipal Credit Union, a person must be elected to membership, paid for one or more shares, paid entrance fees as provided for in the by-laws and must be employed (a) in the city government of the City of New York, or (b) in the government of any of the counties within the territorial limits of the City of New York, or (c) in the Board of Education of the City of New York, or (d) in the Board of Higher Education, or (e) in the New York City Health and Hospitals Corporation, or (f) in the New York City Housing Authority, or (g) in any similar authority now or hereafter organized and existing pursuant to the Public Authorities Law, Laws 1939, Chapter 870, or acts amendatory thereof, where said authority has jurisdiction solely of functions within any or all of the five counties within the territorial limits of the City of New York, or (h) in any agency operating within in the Greater New York City Metropolitan Area and which is, at least in part, funded by the City of New York, the State of New York, or one of the agencies, subdivisions or departments thereof, or (i) by any individual, employer, agency, partnership, corporation, or other entity with which the Credit Union maintained a payroll deduction type relationship as of April 10, 1986, or (j) by or in any hospital, nursing home, health facility, and their affiliates, either private or public, located in the State of New York, or (k) by insurance companies who offer health related insurance in the State of New York, or (l) by the federal government provided such employee works within the territorial limits of the City of New York, or (m) by companies that produce and/or supply hospitals in the State of New York with medical and other type health care products, or (n) by private colleges located in the City of New York and private and public colleges in the counties of Nassau, Suffolk, Westchester, or (o) by Aramark Corporation at Nyack Hospital in Nyack, New York, or (p) employees of the City of Yonkers, New York, or (q) by the City of Mt. Vernon, New York, or (r) Kawasaki Rail Car, Inc., or (s) Municipal Credit Union, or (t) as cemetery workers working within the city of New York, or (u) as social workers and counselors at private centers and not-for-profit shelters located in the City of New York, or (v) by the Archdiocese of New York and Brooklyn, or (w) as taxi dispatchers for airports in the City of New York, or (x) as aircraft fuelers and maintenance workers in the City of New York, or (y) by St. Peter's Church in Yonkers, New York, or (z) any association of such employees. The following additional persons may become members: (1) All students enrolled in: (a) a college, university, school, or institution, in the City University of New York (CUNY) education system; or (b) St. John's University (attending campuses located in New York State); (2) all members of St. Peter's Church in Yonkers, New York; (3) any association of employees which are principally comprised of individuals who are eligible for membership; (4) an officer or employee of the State of New York employed in the City of New York; (5) any other credit union organized under the laws of the State of New York. Membership is not terminated by cessation of employment. All members must maintain at least one share on deposit. Membership is also permitted for the following people pursuant to N.Y. Banking Law 451-A: (1) the family members of persons within the field of membership. "Family member" means a person related by blood, marriage or living in the same household with a person within the field of membership and their lineal ancestors and descendants including persons so related by adoption, siblings, stepparents, stepchildren and stepsiblings; and "household" means persons living in the same residence and maintaining a single economic unit; or (2) any employee of the Credit Union; or (3) any member who leaves the field of membership and who has not withdrawn or been expelled may retain membership; or (4) any incorporated or unincorporated organizations composed principally of persons eligible to membership in the Credit Union and that organization's employees; or (5) any person who is eligible for membership by reason of the fact that he or she is an employee of a common employer or of a credit union shall not become ineligible, after the termination of such employment, as long as he or she receives a pension or annuity from, or under, a plan or other arrangement established by such common employer or credit union. Form 990, Part VI, Section A, Line 7a/b: Election of members to the Board of Directors and the Supervisory Committee takes place at the annual meeting. Members become eligible for election to the Board of Directors or the Supervisory Committee after completing one year of membership. The Credit Union informs the membership not less than 10 days and not more than 45 days prior to the annual meeting of the names of all the candidates and the office for which they are nominated. Elections are held by closed ballot. Form 990, Part VI, Section A, Line 9: The following individuals listed in Part VII, Section A cannot be reached at the Credit Union's mailing address. Their addresses are available upon request. - MARK A RICCA - NORMAN KOHN - RICHARD CASAMASSA - AHMED CAMPBELL - STACY K RILEY - SHANNON MASHBURN - CAROLE PORTER - JANET E PERKINS - LISA M MINGOIA - THOMAS SICILIANO - ROBERT SOLOWAY Form 990, Part VI, Section B, Line 11a: The Form 990 is prepared by an outside accounting firm and reviewed by the EVP. Once the Form 990 is reviewed by the EVP, the Board reviews and approves. A complete copy of the final Form 990 (including all required schedules) as ultimately filed with the IRS is provided to the full Board. Form 990, Part VI, Section B, Line 12c: All employees are covered by the conflict of interest policy, as well as the acting Board. Conflicts of interest are reviewed by the Chairman of the Board and transactions or requests are either approved or denied. Persons with conflicts recuse themselves from participating in the governing body's deliberations and decisions in the transaction. Form 990, Part VI, Section B, Line 15a/b: As of December 31, 2019, the organization employed no officers or key employees. The Credit Union revised its compensation review process in 2019 to include an independent compensation evaluator to review all positions and compensation going forward, this includes reviewing comparable data for reasonableness. The review and decisions will be contemporaneously substantiated. Form 990, Part VI, Section B, Line 19: Financial Statements are available on the website. Other documents are available upon request. Part VII, Section A: On June 22, 2018, the Superintendent of New York State Department of Financial Services removed the then-members of the MCU's Board of Directors pursuant to Sections 41 and 14(1)(p) of the New York Banking Law and Sections 301 and 303 of the New York Financial Services Law due to severe deficiencies and weakness in MCU's internal controls and the Board of Directors' oversight of the management of the affairs, funds, and records of MCU, in a manner that raised significant concerns regarding the oversight of MCU's operations and protection of its membership and for violations of Sections 470 and 471 of the Banking Law. The governing body is currently made up of representatives of the NCUA. There are three examiners and two regional directors. Form 990, Part XI, Line 9: Change in Pension Benefit Assets: $117,874,742