For Vito Sinkus and others in the shrinking Lithuanian enclave around Marquette Park, the KASA Lithuanian Federal Credit Union was a comfortable place where they could chat in their native language and sip a cup of coffee as well as cash their checks.
Sinkus, 70, was one of the first to sign up for the credit union when it opened about nine years ago, he said. But Tuesday afternoon, he was at the tail end of a steady stream of people rattling the locked doors and peering through the darkened windows of the office at 2615 W. 71st St.
KASA Lithuanian was shut down Friday by the National Credit Union Administration, which ordered the credit union liquidated after trying to salvage the insolvent operation for more than a year.
”It`s terrible, what can I say?” Sinkus said. ”They understood Lithuanian. It was easier to make business here.”
The shutdown was not unexpected. Credit union members had received letters in July 1991 informing them that the credit union agency had taken KASA under conservatorship because of financial problems.
Many people subsequently shifted their accounts elsewhere, but some remained loyal to the institution, including older people who couldn`t drive elsewhere and people who spoke limited English. They were caught short.
Birute Podis, 62, had to borrow $100 from her daughter to make it through the weekend because she couldn`t get to her checking account. ”It`s just an inconvenience, really,” she said. ”We know we`ll get the money back.”
Deposits up to $100,000 are insured by the the credit union agency`s Share Insurance Fund, and credit union members should receive checks within two weeks, according to agency officials.
KASA Lithuanian was founded in 1980 to serve members of the Lithuanian Cultural Foundation in Brooklyn, N.Y. It has headquarters in the Richmond Hill section of Queens. The $44 million credit union has 5,400 members.
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In addition to the New York and Chicago branches, there is an office in Detroit, which was also shut down Friday. The agency sold off branches in St. Petersburg, Fla., and Waterbury, Conn., after taking over the credit union last year, said John Hollis, director of the asset liquidation management center.
The agency has taken over about 50 credit unions in the last decade, said spokesman Bob Loftus. About 70 percent of those have been successfully nursed back to health and returned to their members.
”We try to fix things at these credit unions,” Loftus said. ”If we didn`t think we could fix it, we would have just liquidated.”
But after a year of trying and facing $13 million in loan losses at KASA, the agency made that decision Friday.
Agency officials cited ”severe operational problems” caused by past management for the closure and said one person associated with the New York office is suspected of criminal activity.
That information has been turned over to the FBI and the U.S. attorney`s office in New York. Officials with both agencies declined to comment Tuesday. Performing assets in the Chicago branch were sold to other financial institutions, but the agency couldn`t identify which institutions purchased those assets. Credit union members with loans should continue to send payments to the KASA Lithuanian local office until they are notified otherwise, officials said. People with checking accounts have until Monday to transfer them elsewhere.
KASA employed 10 people in New York and four in Chicago. All have been retained to help with the shutdown but will eventually be laid off, Hollis said.
The liquidation will also force the relocation of Margutis, a daily Lithuanian radio program broadcast from the building, which is scheduled to be sold. ”It`s bad, but what can you do?” said program director Petras Petrutis.
At least two financial institutions in the neighborhood, Midland Federal Savings & Loan Association and Standard Federal Bank for Savings, have employees who speak Lithuanian, which should ease the blow of KASA
Lithuanian`s closing.
But the people in Marquette Park feel a more intangible loss.
”They`ll be missed terribly because they were right there,” said Danute Bindokas, editor of Draugus, a local Lithuanian newspaper. ”It was a neighborhood institution.”