NORTH LITTLE ROCK, Ark. — A more detailed look has been provided about a credit union that drew national attention through an Oscar-nominated documentary celebrating its mission to serve underserved communities and which collapsed less than two years after opening, with federal regulators citing unsafe and unsound practices before shutting the institution down.
As the CU Daily reported earlier, People Trust Community Federal Credit Union of North Little Rock was placed into conservatorship and later liquidated by the National Credit Union Administration after regulators identified problems that included unsound lending practices, recordkeeping deficiencies and inadequate internal controls.
The credit union was founded by Arlo Washington, a Little Rock barber and entrepreneur whose efforts to establish the institution were chronicled in The Barber of Little Rock, a short documentary that was nominated for an Academy Award in 2024.
Rapid Deterioration
Financial data reviewed by Arkansas Business showed the credit union’s condition deteriorated rapidly as delinquent loans mounted and capital levels declined.
The publication reported that delinquent loans reached 10.8% of total loans by Sept. 30, 2024, rose to 9.19% at year-end 2024 and climbed to 16% by the end of 2025. Industry standards generally call for delinquency rates to remain below 1%.
At the same time, the credit union’s net worth ratio — a key measure of financial strength — fell from 11.9% in June 2024 to 7.06% a year later. By Sept. 30, 2025, the ratio had dropped to 2.05%, placing the institution in the “significantly undercapitalized” category. By the end of 2025, the ratio had fallen to negative 20.9%, according to Arkansas Business.
CEO Challenges Takeover
Washington challenged the NCUA’s takeover in federal court, arguing that the credit union’s financial problems were exacerbated by rising vendor costs, fraud losses and accounting adjustments ordered by examiners. He also alleged conflicts of interest involving regulators and consultants connected to the conservatorship process.
A federal judge denied Washington’s request to halt the conservatorship.
Arkansas Business reported that People Trust primarily made used-vehicle and unsecured consumer loans, which accounted for the vast majority of its loan portfolio.
The publication also reported that People Trust Community Loan Fund, a separate community development financial institution founded by Washington and the sponsoring organization behind the credit union, is facing scrutiny over delays involving federal housing assistance payments.
Payments Allegedly Not Received
According to Arkansas Business, some landlords and residents participating in a U.S. Department of Housing and Urban Development-funded program have not received payments that normally flow through the organization.
The city of Little Rock has been working with affected residents, and a representative for U.S. Rep. French Hill, R-Ark., said the congressman’s office is reviewing the matter, the publication reported.
One landlord told Arkansas Business he is owed approximately $10,000 in unpaid housing assistance payments.
Washington did not respond to Arkansas Business’ requests for comment.
The full report by Arkansas Business can be found here.
