Former manager barred by NCUA after loan-fraud consent order, months after Illinois credit union's collapse
Lending credit Fraud embezzlement Governance oversight
NCUA barred a former credit union manager after a consent order describing fraudulently prepared loans; she settled without admitting wrongdoing, and the credit union had already been liquidated.
What happened
Aldersgate Federal Credit Union was a small, faith-based credit union in Marion, Illinois, chartered in 1962 to serve clergy, local pastors, and lay employees connected to the Illinois Great Rivers Conference of the United Methodist Church. At the time NCUA acted, it served about 811 members and reported roughly $10.6 million in assets, according to NCUA’s own liquidation announcement.
On June 18, 2025, NCUA placed the credit union into conservatorship. The agency’s announcement did not disclose a reason, stating only that it was working to resolve unspecified issues affecting the credit union’s operations. Less than two weeks later, on July 1, 2025, NCUA liquidated the credit union outright, saying it was insolvent, had no prospect of restoring viable operations, and had violated provisions of the Federal Credit Union Act, including operating in an unsafe and unsound manner. Credit Union Times reported, citing Call Report data, that the credit union’s loan-to-share ratio had climbed to roughly 110% by early 2025 against a peer average near 60%, even though it had reported no loan delinquencies over the prior five years — a combination the trade press flagged as unusual. NCUA’s own press releases did not draw that connection explicitly.
Almost nine months after the liquidation, on March 30, 2026, NCUA and the credit union’s former manager, Marilyn Sullins, signed a consent prohibition order. Sullins had worked at the credit union from 1986 through May 2025. According to the order, NCUA’s board found that from at least January 2020 through May 2025, Sullins fraudulently prepared loan applications and moved funds between member accounts for her personal benefit, breaching her fiduciary duties to the credit union and its members and engaging in unsafe or unsound practices, with losses NCUA put at more than $2 million. Sullins agreed to the order without admitting or denying those findings — both the order itself and NCUA’s press release describe the settlement as reached without an admission of wrongdoing. Under the order, she is permanently barred from participating in the affairs of any federally insured depository institution unless she obtains prior written consent from both NCUA and the relevant regulator. NCUA made the order public on May 29, 2026, as part of a press release covering five individuals barred from the industry that period.
NCUA’s own June and July 2025 releases about the conservatorship and liquidation do not explicitly tie the credit union’s failure to Sullins’s conduct as later described in the March 2026 order — they refer only to “operational issues” and unsafe-and-unsound practices in general terms. This page reports both matters as NCUA and Credit Union Times have described them; it does not draw a causal connection between the two that the sources themselves do not make.
Where it stands
Aldersgate Federal Credit Union no longer exists. It was fully liquidated in July 2025, and NCUA’s Asset Management and Assistance Center handled member share-insurance claims and payouts. The consent prohibition order against Marilyn Sullins is final and not something that will be further litigated; she settled without admitting or denying NCUA’s findings, and no criminal charges against her were identified in the primary sources reviewed for this page as of July 2026. If that changes, this page will be updated.
Questions this raises for your committee
The questions below are generalized prompts for your own credit union’s committee, not a claim about what Aldersgate’s committee — or anyone there — did or didn’t do. NCUA’s public documents don’t describe the credit union’s internal audit or committee activity at all, and this page doesn’t speculate about it.
Timeline
- 2020-01-01 Start of the period NCUA's later consent order against the credit union's former manager, Marilyn Sullins, describes — fraudulently prepared loan applications and transfers of funds between member accounts, continuing through May 2025, per the order. [3]
- 2025-06-18 NCUA placed Aldersgate FCU into conservatorship. The agency's announcement did not state a cause, saying only that it was working to resolve issues affecting the credit union's operations.
- 2025-07-01 NCUA liquidated Aldersgate FCU, stating the credit union was insolvent with no prospect of restoring viable operations and had violated provisions of the Federal Credit Union Act, including operating in an unsafe and unsound manner. [2]
- 2026-03-30 Marilyn Sullins signed a consent prohibition order with NCUA; an NCUA regional director signed on behalf of the NCUA Board the same date. [3]
- 2026-05-29 NCUA publicly announced the prohibition order against Sullins as part of a press release covering five individuals barred from the industry. [4]
Questions this raises for your committee
When your committee or an outside auditor samples loan files, does the testing verify the underlying documentation — income records, collateral titles, appraisals — against what's in the file, or only confirm that a file exists?
A loan file can look procedurally complete, with a signed application and the required forms present, while the substance behind it is fabricated. Testing that a document exists is not the same as testing that it's authentic, and the second kind of testing is what catches fabricated originations.
At a credit union small enough that one person handles both loan origination and transfers between member accounts, what independent check exists on that person's work?
Very small credit unions often can't fully separate origination, disbursement, and account-transfer duties across different staff — there may not be enough staff. When true segregation of duties isn't possible, the compensating control (an independent second reviewer, an exception report someone outside the department actually reads, dual authorization on transfers) is what has to carry the weight instead.
Does your committee or board look at the loan-to-share ratio trend alongside delinquency and charge-off trends, or does a rising ratio with no accompanying delinquency read as good news on its own?
Rapid loan growth that isn't matched by any rise in delinquency can be entirely legitimate. It can also mean loan volume is being generated in a way that doesn't show up as late payments — at least not yet. Reading growth and credit-quality data together, rather than either in isolation, is what surfaces that kind of mismatch earlier.
Sources
- primary Aldersgate Federal Credit Union Conserved — NCUA, 2025-06-18
- primary Aldersgate Federal Credit Union Closes — NCUA, 2025-07-01
- primary Administrative Order: In the Matter of Marilyn Sullins (Docket No. 25-0042-WR) — NCUA, 2026-03-30
- primary NCUA Prohibits Five Individuals from Participating in the Affairs of Any Federally Insured Depository Institution — NCUA, 2026-05-29
- secondary NCUA Places Aldersgate FCU Into Conservatorship Citing Unspecified Operational Concerns — Credit Union Times, 2025-06-18
- secondary Aldersgate FCU Liquidated Days After Conservatorship — Credit Union Times, 2025-07-01
Update log
- 2026-07-23 Page created following NCUA's May 2026 announcement of the consent prohibition order against Aldersgate FCU's former manager.
This is not legal, accounting, or compliance advice. Verify against the official source and your own professional advisors.