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Wednesday, July 15, 2009

Floundering in Quicksand


Since April, Priority One Credit Union's President, Charles R. Wiggington, Sr. has defied state law, refusing to post the credit union's Monthly Financial Income Statements.

We of course find his refusal more than a little peculiar when one considers his chronic declarations that business has improved. So why not post the evidence that would support your statement? He's also recently complained that he's tired of our frequent reports concerning his refusals to post the income statements. All we can say is, if your tired of reading about your refusals, then post the statements. 

Here again is the California code which describes the credit union's obligation to post the statements:

California Code of Regulations, Title 10, Chapter 1, Section 30.701(c): 

The Credit Union shall post copies of its statement of financial condition and statement of income in a conspicuous place in each office of the credit union or at a place convenient to the members as designated by the board of directors, where they shall remain posted until replaced by the financial statements of the next succeeding month. In lieu of posting copies of such financial statements, a credit union may post a notice in a conspicuous place in each office of the credit union stating that copies of the financial statements are available upon request, and the credit union shall make copies of the financial statements available to members upon request."

Having grown weary of President Wiggington's frequent defiance of state law, a member of the credit union recently filed a complaint with the DFI. The DFI contacted the President by phone and were told by President Wiggington, himself, that the financials have always been posted at all branches. The President lied. Not only did he lie to the DFI, but he immediately afterwards, called the Los Angeles, Van Nuys, Burbank, and Redlands branches and informed them that they would each be provided current statements, later that same day. 

The DFI whose investigation was minimal, at best, sent the following email to the member who filed the complaint:

The CEO of the Credit Union was contacted, and he stated that the statements are posted at each branch office. He did mention that there was a problem at their Valencia office recently where the current statements had not been posted and what was posted was stale dated. He indicated that this was corrected and the manager of that location was informed that the financials were to be posted as soon as they were received. He also stated that you may request copies of past financial statements, if you like. 

If you would like to file a complaint against the Credit Union, please let us know. 

Thank you, 

Consumer Services Office 
California Department of Financial Institutions

President Wiggington may not be an expert liar, but he is a liar. The member accepted the DFI's invitation and filed a second complaint. During the week of July 6th, the President received a letter from the DFI, accompanied by a form requiring his completion and signature. On Monday, July 13, 2009, the financials for the month of June were finally posted at all branches. The President was forced to concede to state law. It's obvious that President Wiggington would never have tried to hide the financials if business were actually as good as he says it is and his refusal to post the statements attests to his character and dishonest proclivities. 


As reported previously, during this year's annual meeting, the apparently nervous and heavily perspiring President assured attendees that the credit union remains financially sound though exerting every effort to hide the credit union's Monthly Income Statements. 

During the same meeting, Board Chair, Diedra Harris-Brooks said little about the credit union's actual documented financial performance and she announced that the Treasurer's Report would be read, however, the report was never read. 

Supervisory Committee Chair, Cornelia Simmons, declared as she does year after year, that the credit union is financially sound. If Priority One's performance were sound, why hide the monthly financials in defiance to state law and why would Mrs. Harris-Brooks have announced during the annual meeting that the Treasurer's Report would be read and then fail to read it? 

Prior to the start of the meeting, copies of the 2008 Annual Report were distributed though the contents of the report were never read or discussed during the 30-minute meeting which followed. However, we've reviewed the report and it shows that the year-to-date amount of Net Income is $4 million in the RED.  So how did Cornelia Simmons determine that $4 million in the negative is an indicator that Priority One's financials are sound? 

Last March, a reader sent us the following message:

If the NCUA takes over POCU..... and if you ask me to bet, I would say the clock is ticking... your blog is well known in the industry so I gotta believe that the DFI and NCUA are watching.I was looking around the POCU web site for the Annual Meeting date because one of your readers inquired, but before I could find the date, I found something that should catch some attention and make for an entertaining post if you’re interested. 

On the front page of their site they are advertising a $100k CD at 3.3% APY and a new auto loan rate of 3.49% APY. It doesn't take a rocket scientist to know that when you only have a spread of 19 basis points you’re going to lose money. Even if they had 0% charge-offs, which of course they won’t, they would lose money because their overhead per loan costs more than 19 bp. And that’s not including marketing costs or the fact that since they are already hemorrhaging money. How exactly can the afford to do this?

A few weeks later, the same reader sent us another message:

I do not see how they can save this ship. I seriously have to believe that 

1) They will be merged by 12/31; or, 
2) they will be liquidated by 12/31/09. 

Sad, really sad

We also received the following comment from another reader in response to our last post:

What happened to the election? The balance on the 20 million that was borrowed has not gone down. Or are they are making interest payments only!!!!!!!!!! $600,000.00 in interest payments

We've not calculated the actual amount that has been spent in interest alone against the $20 million loan borrowed in mid-2008 by President Wiggington. The credit union's finanical statements reference that payments made by the credit union approximate between $30,000 and $33,000 per month. What's more, the payments are only submitted to pay interest on the loan amount. Depending on when the loan may eventually be paid off in its entirety, the amount paid in interest may in fact exceed $600,000. Is this an example of the President's effort to work "smarter"?  

The June 2009 
Monthly Income Statement

The President has finally posted the credit union's Monthly Income Statement, albeit it against his will. Here are the figures:

Loans $114,441,315.16

Less: Allowance for Loan Losses

Net Loans:

Accounts Receivable



Investment in COOP

Investment in FSCC

NCUA Deposit

Accrued Income

Prepaid Expenses

Other Assets


Fixed Assets

Less Accumulated Depreciation

Net Fixed Assets

Total Assets


Accounts Payable

Notes Payable

Accrued Expenses

Dividends Payable

Suspense Accounts

Other Liabilities


Total Liabilities


Regular Reserve

Undivided Income

Total Equity

Total Liabilties and Equity

Operating Income

Income from Investments

Fees and Charges

Miscellaneous Operating Income



Employee Salaries/Bonus

Temporary Personal

Personal Time Off

Employee Pension Plan

Workers Compensation Insurance

Employee Medical Insurance

Medicare Expense-Employer

Social Security Taxes-Employer

FUTA Expense- Employer

SUI Expense- Employer

Life/Disability Insurance- Employer

Credit Union League Dues

Membership, Dues, & Subscription

Branch Lease

Property Taxes

Janitor Expense

Utility Expense

Building Maintenance


Security Expenses

Telephone Expenses


Share Draft Expenses

Equpment Maintenance

Stationeries and Supplies

Surety Bond Premium & Other Insurance

Depreciation- Furniture and Equipment

ATM Expense

Check Card Expense

Technology and Computer Expense

Miscellaneous Bank Charges

Education Expense-Staff

Education Expense-Senior Management

Education Expense-Supervisory Committee

Education Expense-Board of Directors

Training Expense

Advertising Expenses

Loan Promotions

Promotional Items

Member Research


Business Development Expense

Collection Expense

Real Estate Expense

Indirect Dealer Fee

VISA Expense

Credit Investigation Expenses

Lending Center

Lending Expense

Legal Expenses

Audit Expenses

Consultancy Fees

Associated Management Company

Shared Branching Expense

CUSO Expense

Provision for Loan Losses

Borrower's Insurance

NCUSIF Stablization Expense

DFI Admin. Fee

Cash Short (and Over)

Interest on Borrowed Money

Annual Meeting Expense

Board of Directors/Supervisors

Annual Retreat

ADP Charges

Credti Union Car Expenses


Mileage and Reimbursements

General Expenses

Courier Services

Storage Expenses

Branch Expenses

Other Losses

Merger Expense

Succession/Strategic Planning

Ballot Incident Expense

Total Operating Expenses

Income (loss) from Operations

Dividends Paid

Loss (Gain) on Disp of Assets

Loss (Gain) on Disp of investment

Franchise Tax Board

Total Dividends & Other Income

Net Income (Loss)

Net Income (Loss), Year-to-Date

NET INCOME obtained from the credit union's Quarterly Financial Reports filed with the NCUA 

Quarter Ending June 2008

Quarter Ending September 2008

Quarter Ending December 2008

Quarter Ending March 2009

Quarter Ending June 2009

No wonder the President felt emotionally driven to hide the credit union's financials. Priority One remains in the negative, but didn';t President Wiggington; Board Chair,  Diedra Harris-Brooks; and Supervisory Chair, Cornelia Simmons, describe the credit union as financially sound? Is there anytime when a negative Net Income balance indicates financial soundness? 


President Wiggington has a convoluted perception of what constitutes "thinking smarter." He implements a company wage freeze and reduces budget and then hires a COO. His alleged efforts to stabilize losses are chronically undermined by excessive spending. Not only have his decisions, like choosing to spend money on a $600,000 phone system and unnecessary updated email system, diminished the credit union's financial standing but his personal undisciplined behaviors, like his sexual harassing of a former female employee, have forced the credit union to spend monies on attorneys, investigators and consultants. What's more, during his approximate 6-week suspension, during which an investigation was conducted, the Board Chair, Diedra Harris-Brooks, deemed it prudent to place him on suspension with pay though all non-exempt personnel when suspended, are done so without pay. 

What's more, a few weeks following his reinstatement, the President was paid over $7000 for unused sicktime. Shouldn't he  have been ordered to pay for all attorney and investigation costs, particularly when the evidence proved he had indeed sexually harassed the former employee?

President Wiggington, the Board Chair and some of his other executives are depleted the credit union's financial resources, making certain that they remain employed and that they are allotted wage increases and bonuses. 


Emanuel Swedenborg, Arcana Coelestia, sec. 4299

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Anonymous said...

Wiggington would never work for $1. Hes too selfish and P1 is just a title for him. If it meant something important he would work hard, but he is lazy and is just there to pick up a check. Last thursday he walked through our dept talking on a cell phone. He was saying that the problems with the computers at work is because employees got emails with virus. He is such a liar. I was told by someone in IT that they discovered the problem was caused by the guy Wiggington brought in to scan our computers. Yup, another stupid idea from a stupid liar.

Anonymous said...

After reading this post, I decided to investigate and do a comparison with POCU and three other local credit unions. I chose Water and Power CU, Wescom CU, and Western Federal CU and I concluded based on thier financials that most Credit Unions are experiencing some loses; which has ultimately affected their net income. And yet these credit union still posted there financials.

My question to Mr. Wiggington, why th mystery with financials? What are you trying to conceal from the employees and the membership.

After months of hiding the financials from the membership he finally posted it...

Make you wonder if he is stealing from the membership with false investments....

Things that make you say......Hmmm!

Dexter said...

That's a good point. A lot of credit unions who are reporting negative net income were credit unions who did subprime lending. Just like banks, some credit unions made the same mistakes and lent money to people who were not really qualified and pumped up income/wages and other financials to get them financed. But P1 didn't do subprime lending, so why is the cu in the negative? And thats a good point why is Charles hiding financials. Is he cooking the books, is he channeling money illegally, what is he doing that he feels he has to hide the truth from members and employees? Does make you think.

Zeek said...

Charles has done so many bad things since he got hired back in the 90's that if I was him, I'd be hiding things too.

The staff of the old credit resolutions dept used to say he was getting kick backs from their boss, the same man who helped get Charles the car that used to be owned by Danny Wafa. Wiggington & Mike Lee did this without Mr Harris ever knowing. Wiggington used to get kick backs from his friend Henry Justice each time a member bought a car from Justice Auto. Even after Henry Justice stole more than $80,000 from P1 they are still friends. Wiggington almost brought Justice back to do business with P1 back in 08 but scraps his plans when he was exposed on this blog.

I know he fixes the books. He changes the delinquency report. Because delinquencies are high, he takes out some of them from the report and puts them on next month's report. This way the deliquencies don't look so high. If the delinquencies are too high again on the next month, he fixes the numbers again. He has been doing this since before he became president. Harris made a big mistake not checking on what Wiggington did if he had he would have discovered what Wiggington was doing and maybe fired him.

I don't think the state has done a thorough enough audit. If they had they would have found a log of illegal acts. He has so many reasons for hiding the financials and you can bet your last dollar, he's hiding a lot more than just financials! And watch, this month member social security and annuity checks won't be posted untilt he 1st of the month, because he has ordered that these not be posted for what tax purposes. The guys got more skelatons than a grave yard.

Anonymous said...

One thing Wigg bragged about at the employee meeting back in March is that Priority never entered subprime home lending. So why the losses and why hide the financials? Something smells.

Anonymous said...

He's always talking horribly about employees but with all he has done all these years, he should shut his big mouth!

Anonymous said...

What about that lady that sells life insurance to the members. She used to be the manager at Valencia and she created 1 million in losses. She booked many loans to unqualified members. Nobody has even mentioned her. She used P1 time to do her own personal stuff used credit union employees to do her personal stuff including picking up her kids from school. A lot of shady stuff happened while she was manager. Yet P1 Still let her be the CU rep for life insurance even though we already had Selman. Now there is 2 different life insurance companies. Reps dont even know which one the member is talking about. Well let me change that statement AIL has awful customer service and bugs the members. Selman has been the original Ins. Company for years and are great. Why would you give someone that you almost fired, lost 1 mil, and pretty much gave away the store another chance? Doesnt make sense.

Anonymous said...

That's a good point. P1 has taken on "free" services provided through their former employee, Kathy Santos, who was once the branch mgr of the Valencia office.

When she was branch manager, Priority One provided her with limits needed to approve loans but unfortunately, a large # of those loans went bad. Here again is an example P1 providing employees with tremendous responsibility and authority but no training. At the time, the VP of Oper was Charles Wiggington. He knew she was not trained properly but never did anything to provide her with needed training and allowed her to continue approving loans.

When the loans she funded began to go bad, Charles did nothing to stop the situation. When Mr Harris realized that a large # of loans had become deliquent, Charles told his staff, "She's (Kathy) is not taking me down with her. I'll make sure she goes." And yes, she was fired but Charles should have been fired too.

Kathy was not all bad. She really involved herself deeply with the community in Santa Clarita and succeeded in getting P1's name out in the community. She worked long hours and attended many funcations which made the Valencia branch successful, a fact Charles knows is true.

Yeah, Kathy messed up and probably deserved termination but so did Charles who as VP of Operations should have made certain she was fully trained.

There are again, you have Charles bumbling something he was assigned to oversee but he would rather spend time telling people about his mamma and aunt as if anyone really cares!

Anonymous said...

Valencia Branch Manager was protected by Rodger, and she had plenty of training and years of experience with differetn credit unions.

Anonymous said...

By not paying down the principal on the 20 mm P1 assets size will be at the 180 mm after you pay the loan off asset size will drop to 160mm. About 14 mm less than when he took over, plus the cd that he offers at 6% with the cars rates below 5% what’s that all about? Charles is a joke in the industry, no on can believe he made CEO
and the board is a bigger joke , I also believe that this credit union is gong under fast.

You would think the board would move quickly and call the former CEO to come get things back in order and help P1 get back in shape, but you have a lot of green eyed monsters on the board and that would mean that the “queen” would not have her way.

Yes Diedra that means you!

Anonymous said...

Yes it is unbelievable that the board has not acted, and before Mr. Harris took over
P1 credit union was going to be taken over but he brought it way up the assets size was around $176mm before Mr. Harris left, from around 90m when he first took over. Now the assets size will be around 160 mm after the loan is paid off.

Which leads to questions like is the board honest or they getting kick backs along with Charles?

The auditors real need to look at their accounts.

What is going on with the Elections? David Davidson put in to run yet he has not heard from them.

Why is the board still clinging on to Charles how much are they getting, low interest rates on their loans higher interest rates on the CD? Who knows what’s going on with them?

Mr. Harris if you are reading this come back the place is going to hell real quick.

Anonymous said...

"I don’t want to yell fire in the theatre, but check this out: In June 2008 POCU had $720,000 in their Allowance for Loan Loss, by 2009 they had set aside $2.6 million almost double what they had in March 2009 of $1.450m.

A take over by the DFI on 12/31 could be too conservative (at the rate they are losing money) 9/30 the DFI in the house could be the reality. What a shame."

Anonymous said...

The last 2 weeks, Wiggington is hardly in the office & when he is he's walking aboutn talking on his cellular or looking at whatever it is he looks at on his laptop and PC. But it ain't work.

Dr No said...

June 2008 $720,000 Allowance for Loan Loss

March 2009 $1.45 million Allowance for Loan Loss

Now, later in 2009, the amount has almost doubled to $2.6 million

Wow! Obviously, the amount needed to cover loan losses is increasing instead of decreasing.

Some of you are right, Priority One didn't enter the subprime lending market and saved themselves. Smart move on the part of Harris. But what has caused the losses which finally hit in late 2008 and have continued in 2009?

What has Wiggington spent money on? And why borrow $20 million? I notice no one from the credit union or the Board has ever provided an explanation to justify why the money had to be borrowed. So why was it borrowed? Anyone? Mr. Wiggington?

Maybe the reader is right, The DFI might come a knockin' later this year maybe in just a couple of months. Sad because it was avoidable. Pathetic because the board didn't consider the well-being of members or for that fact, employees. They should be sued.

Anonymous said...

He hids the financials because the credit union is getting more in the negative.

He hides the financials because he doesn't want readers to see that P1borrowed $20 million and because they are only paying off the interest.

He hides the financials because he doesn't want readers to see that the Allowance for loan losses keeps increasing.

Didn't he think he'd be found out?

John said...

This is the complete message I received earlier today, from one of this blog's readers:

I don’t want to yell fire in the theater, but check this out:

In June 2008 POCU had $720,000 in their Allowance for Loan Loss, by 2009 they had set aside $2.6 million almost double what they had in March 2009 of $1.450m.

As of the 6/30/09 5300 Call Report, P1 reported capital of about 5%....that would mean that by the NCUA's standards they are under or are at a "under capitalized" level.

A conservatorship by the DFI on 12/31 could be too conservative (at the rate they are losing money) 9/30 the DFI in the house could be the reality.

The only good news for members is that their deposits are insured to $250k by the NCUA.

What a shame...P1 could have been great.

Anonymous said...

What a pity 1 person can cause so much damage.

Anonymous said...

Whats up with the three hours plus lunches? do any of those three do any kind of work?

Anonymous said...

the 20 million was given to WesCorp
as a loan.

Anonymous said...

Has any one heard what is happening with the election?

Anonymous said...

Accepting warrents from the State of California! Who's idea was that
it's on your web site

Good Job Wiggington, you keep showing us how stupid you are.

Anonymous said...

For months its been said that Wiggington borrowed the $20 million to lend to Wescorp so that they could pay it back to P1 with interest. Problem is he still owes the $20 million plus whatever interest is owed on the loan. I just wonder is the interest being paid by Wescorp offset what Priority One owes on the loan? And, after what happened to Wescorp do they still owe P1 any part of the loan?

Anonymous said...

Ya, what happened to the election? This is too long.

And I just visited P1's website at The person who wrote that P1 is "Accepting warrents from the State of California!" is right. Here's what's written on their site:

Yes! We too are California citizens and doing our part to support the state.

Yes! We are accepting California Registered Warrants (IOU's)
from Priority One Credit Union Members.

The last time IOUs were issued was back in 1992 but the economic problems then were nothing compared to the problems we have now. At the time, some banks honored the IOU's. Can you pay your taxes using the state issued IOU's? Yeah, right. Not a smart move on the part of P1.

Anonymous said...

John, a person wrote "As of the 6/30/09 5300 Call Report, P1 reported capital of about 5%....that would mean that by the NCUA's standards they are under or are at a "under capitalized" level."

What is the capitalized level? Isn't it like 7%? If they are undercapitalized this is realy, really bad.

Did you know that P1 is getting ready to install a phone center?
Theres a wall behind the teller area at S Pas and that's where they are going to set up the call center. Its the new COO's idea.
How much is that going to cost? Why do they keep spending on trying to correct things instead of correcting the problems they already have?

Anonymous said...


I have just been advised that P1's reported capital is not 5% as reported yesterday by a reader of this blog, but 7% which under NCUA guidelines, means they remain capitalizaed albeit it be by only 2%.

Anonymous said...

Have any of you spent time going through June's financials? It contains some odd entries.

Under Education Expense-Staff Priority One spent $79.00 in June. That seems like a very little amount for staff development, doesn't it? But its a lot more than Priority spent on education for senior management, the supervisory committee or the board of directors.

Education Expense-Senior Management

Education Expense-Supervisory Committee

Education Expense-Board of Directors

In a lot of credit unions, money is spent educating Supervisory Committee members and members of the Board, but not at Priority One. This is probably why the committee and the board are have made a mess out of Priority One. They have no desire to learn or to develop their knowledge.

For June, $19,241.93 was spent on legal expenses according to the financials. Why?

In June, Priority One paid $5371 for Shard Branching though in part of June and July, members couldn't access the program which was a waste of money for a credit union that is already losing money.

Anonymous said...

Yesterday, P1 opened its newest branch. There were a few postal people, some P1 employees but no business owners from the area. What a stupid oversight! A PR nightmare! After the ribbon was cut, Charles didn't say thank you, welcome, how are you, kiss my ass -nothing. He has got to be the stupidist CEO anyone has ever seen. I guess he's too dumb to know that when you cut the ribbon you're supposed to welcome visitors.

Anonymous said...

This board and superisory committe
have travel alot and bring back not a dam thing, Veags is a big one for the board Europe they have been there and had thier own Christmas party (big time bucks).

Some of the board are nice people but they want thier trips and $30.00 a meeting and that's it.

AS you can see Wiggington is still there, if the board was smart they would first not have replace Harris
with wigg, and second they would have remove wiggalong time ago,
and called Harris back to get that credit union back to what it was.

Anonymous said...

Even if they didn't offer subprime lending, P1 would have been hit hard by the % owed to the NCUA from the stabilization act. But even so, they knew they were going to have to pay that money, why weren't they prepared? They have a CFO and Wiggington is the CEO, how could they not have had the money set aside to pay the NCUA? And the reason they are probably only paying interest on the $20 mill is probably because they can't afford to pay back that loan. If they lent the $ to Wescorp, how much has Wescorp paid back?

Anonymous said...

About 5 years ago the board of directors traveled to Europe to attend "educational" classes. Mr. Harris protested but the board decided they needed to go to Europe. Do any of you really believe they attended classes? Is there any proof they attended classes? And why do they get paid $30 to attend board meetings? Is the $30 for gas? If so, do they actually spend $30 traveling to and from P1? Plus don't they get food while at the meeting?

I heard only one board member went to the grand opening of the Airport branch. What happened to nosey old Diedra? How about Saffold the member who believes P1 needs a Black ceo vs a competent one?


Anonymous said...

$30.00 is what the get for comming to the meeting, Mr. harris stop it at one point however afer he left it's a free for all. Joe Marchica is the one who pushed for hat.They also get mileage.

any one knows what happen to the election?

Anonymous said...

When Wiggington found out Dave Davidson was going to run for a chair on the supervisory committee, he and Diedra slowed down the preparations for the election process to give themselves time to plot a plan. They got a new nominee, who filed his nomination AFTER the deadline. The election is going to happen but they are making certain that their guy has a chance to beat Dave Davidson. Stupid and one of the other board members couldn't keep quite their plan a secret.

Anonymous said...

Some people want to do something good in life to help others and to be remembered, but Wiggington just wants people to know him as the guy with no morals. What a goal.

Anonymous said...

Who ever said that P1 might have a take over looks right to me.
looked at the reports on NCUA and
P1 has gone down hill.
What are you waiting for Board !!! need to move quickly or we will be closing are doors

Someone please explain why Wiggington is still there!

Anonymous said...

what has happen to the election other that the Queen putting her friend to run after the closing of the nomination. Which i did call the DFI and NCUA to report that Miss Queen had put her friend in after she found out the David Davidson was runing.

Come on Miss Queen we know what you are up to!

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