SCRANTON, Penn.—The troubled Valor Credit Union, whose former CEO has pleaded guilty to bank fraud, has approved a merger with Pentagon FCU.
The vast majority of Valor’s members voted to approve the merger, $20.6-billion PenFed, based in Alexandria, Va., reported.
As CUToday.info reported, the $227-million CU’s former leader, Sean Jelen, currently faces up to 60 years in prison for stealing more than $700,000 to bankroll a lavish lifestyle and pay down personal debts. Jelen was initially fired last year following a drunk driving charge in a credit union-owned Mercedes Benz that he initially declined to return to VFCU.
Jelen was also accused of rigging elections held for the Valor Credit Union board of directors, whereby he elected and subsequently impersonated fictitious members of the board of directors and its supervising committee,
“We are very proud to welcome the members and employees of Valor Federal Credit Union to the PenFed family. They join the more than 36,500 other Pennsylvania residents who are already members of PenFed and benefitting from the great rates we provide to all our members,” said PenFed president and CEO James Schenck. “PenFed exists to provide exceptional value to its members and we are confident that this partnership will empower many in Northeastern Pennsylvania to do better financially. We look forward to serving our newest members and being an active participant in the community.”
“We have worked closely with Valor’s board to create a partnership that takes perfect care of all members and employees,” said PenFed Executive Vice President and President of Affiliated Businesses Shashi Vohra. “Valor’s members will benefit enormously from our best-in-class products and services and employees will be welcomed to our family with superior benefits and career-enhancing opportunities.”
“Valor Federal Credit Union’s board of directors is excited and confident that a partnership with PenFed will prove to be very positive for our loyal members, our dedicated employees, and the community as a whole,” said Valor Federal Credit Union Chairman Andrew Weinberger. “Not only will our members receive a one-time special dividend, but we are confident that they will be financially empowered by PenFed’s market-leading products, superior rates, and world-class member services. We are also proud of PenFed’s financial commitment to the community.”
“As we evaluated strategic alternatives, it was clear to us that PenFed, one of our nation’s strongest and safest credit unions, was our best choice,” said Chris Dawe, Valor’s interim CEO. “I am excited for our members and valued staff.”
Valor reported net losses of $2.4 million and $2.25 million in last year’s second and third quarters, according to Call Report data. As a result of the losses last year, Valor had a net worth ratio of 5.54%.