State banking regulators cite governance, compliance failures at CT credit union

A tiny credit union in Fairfield County has entered into a consent order with the Connecticut Department of Banking following a regulatory examination that identified what the agency described as governance, recordkeeping and compliance deficiencies.

Trumbull Credit Union, with $3.1 million in assets and about 437 members, agreed to the order, issued Dec. 17 by Banking Commissioner Jorge L. Perez, resolving the matter without admitting or denying the regulator’s findings. Consent orders are administrative settlements that impose corrective actions.

According to the order, regulators alleged that between Dec. 31, 2022, and approximately Sept. 30, 2025, the state-chartered credit union had “inadequate corporate governance,” failed to maintain accurate books and records, and did not hold required monthly board meetings.

The examination also found the credit union lacked an active supervisory committee with at least three members, did not conduct an independent Bank Secrecy Act audit or risk assessment, and failed to maintain certain information security and vendor management controls.

The department concluded the issues constituted unsafe and unsound practices under the Connecticut Credit Union Act.

Trumbull Credit Union didn’t immediately return a call Thursday morning seeking comment.

Under the agreement, the credit union’s board of directors must increase its oversight of operations and hold meetings at least monthly. Directors are required to review detailed financial and operational reports, including income and expenses, loan activity, investments, liquidity levels and internal controls. Comprehensive board minutes documenting those reviews must be maintained.

The order also requires the immediate establishment of a supervisory committee and adoption of a board attendance policy that includes automatic removal provisions for noncompliance.

Within 30 days, the credit union must retain an outside consultant acceptable to regulators to evaluate the qualifications and staffing levels of the board, management and employees.

That assessment must include recommendations for any necessary personnel changes or additions.

The consent order further mandates strengthened internal controls, including monthly reconciliation of general ledger accounts, preparation of accurate financial statements and proper calculation of the allowance for loan and lease losses.

An independent third party must conduct a comprehensive audit and full verification of member accounts. The credit union is also required to provide regular financial reporting to both the Department of Banking and the National Credit Union Administration.

The agreement imposes new Bank Secrecy Act compliance requirements, including annual training for staff and directors and independent program reviews.

In addition, the credit union must implement a formal incident response plan, vendor management program and written information security program. Any security incidents must be reported to regulators within 72 hours.

The consent order remains in effect unless modified or terminated in writing by regulators.

The credit union lists its address as 366 Church Hill Road, which is also the location of the town of Trumbull’s Public Works Department.