Government regulators rarely bring good news when they enter a bank, credit union or other lending institution, but the National Credit Union Association heralded the efforts by a local credit union and released it from government oversight.

In other words, Keys Federal Credit Union is back on its feet and in charge of its own assets and operations for the first time in six years. The credit union announced recently the installment of a new all-volunteer board of directors, also for the first time in six years

The seven board members, all of whom are longtime members of the credit union, are Chairman Ron Demes, Vice Chair Greg Sullivan, Treasurer Jonathan Crane, Secretary John Mumford, Denise Rohrer, Carrie Helliesen, Denise Preuss and Keys Federal Credit Union President and CEO Scott Duszynski.

“We’re the first credit union to get out of conservatorship since 2013,” Duszynski said.

“And the first federal credit union, ever, to come out of it,” added Marketing Director Mary Lou Carn.

Keys Federal, the oldest financial institution in the Florida Keys, will celebrate its 75th anniversary next month. But it nearly succumbed to the real estate market crash between 2007 and 2011, said Duszynski, who has worked for the credit union for 20 years and was its chief financial officer in 2009, when the credit union dissolved its board of directors and voluntarily entered conservatorship.

“The decision to conserve a credit union enables the institution to continue normal operations with expert management in place, correcting previous service and operational weaknesses,” is how financial writer Louis Scatigna explains the oversight designation.

The NCUA is the overseeing entity that insures deposits at a credit union, in much the same way as the FDIC (Federal Deposit Insurance Corporationi) insures bank deposits.

“Conservatorship normally occurs when NCUA regulators feel there is some danger to that insurance fund, and that a credit union will end up costing that fund money,” Duszynski said Monday. “But usually by then it’s too late. In 2009, our previous board could not agree on what to do in light of the real estate collapse and mortgage defaults. So they felt it best to hand control over to the regulators. By entering conservatorship, the board was dissolved and the CEO has to be replaced by one named by the NCUA. We entered it voluntarily in 2009, but in all honesty, we would have ended up there anyway.”

Duszynski recalled the “crazy times” that plagued KFCU for a few unsteady years between 2007 and 2011.

The problems started with the 2007 firing  of former president and CEO John Dolan-Heitlinger, who in turn sued the credit union, seeking about $600,000 in accrued compensation. He eventually settled with the credit union for an undisclosed amount and was replaced by CEO Bob Watson from January 2008 until the conservatorship occurred in November 2009.

“Then we had some fill-in CEOs named by the NCUA until they put me in place as president and CEO in May 2011,” Duszynski said. “I’d been chief financial officer since 2007, and in all honesty, the only reason I’m still here was because I had tried to warn  the prior management over and over again about the problems we were facing.”

Duszynski said the problems were more of a result of the real estate crash and the overall economy, rather than the actions of a single person. He also commended the credit union’s staff, members, local businesses and the government regulators for their help in getting the institution back on solid ground.

“A lot of people gave us a lot of assistance to make this happen,” Duszynski said, ticking off the extensive training the new board members have attended to familiarize themselves with their roles and responsibilities.

“We lost more than $5 million in 2010, which is a huge loss for us,” Duszynski said. “In 2011, we lost more than $7 million from mortgages and other loan defaults. I remember one week in 2011, when 11 different members showed up at our Peary Court offices, car keys in hand, to turn their cars over to us because they couldn’t make the payments. It was a crazy time, and we were much too concentrated on mortgages when the market collapsed. I’m very happy to say that has all changed.”

Finally, in 2012, things started turning around for the credit union, its members and Keys residents in general.

“Although a long time in coming, the recovery of Keys Federal Credit Union is a great success story,” NCUA Board Chair Debbie Matz said last week in a prepared statement announcing the end of the conservatorship. “This remarkable recovery was made possible through the collaborative efforts of the [credit union’s] management team and staff, its advisory board, NCUA staff and the loyal members who stuck with their credit union through turbulent times.”