ALBUQUERQUE, N.M. — U.S. Eagle Federal Credit Union is facing a $2.8 million federal lawsuit filed by a Texas bank alleging the credit union knowingly sold troubled commercial loans backed by federal guarantees without disclosing financial problems involving the borrowers.
The lawsuit comes five months after the U.S. Department of Agriculture barred U.S. Eagle and nine other lenders from participating in a federal loan guarantee program because of concerns over delinquent loans.
According to the Albuquerque Journal, Fidelity Bank of Texas filed the lawsuit Sept. 15 in U.S. District Court in New Mexico, alleging U.S. Eagle originated risky commercial loans in 2023 under a USDA guarantee program and subsequently sold portions of those loans to other financial institutions at a premium.
The lawsuit alleges fraud, breach of contract and breach of the duty of good faith and seeks $2.8 million in damages. Federal court records confirm the filing under case No. 1:26-cv-03071.
Credit Union Denies Allegations
U.S. Eagle President and CEO Michael Moore told the Albuquerque Journal the credit union disputes the allegations and intends to defend itself in court.
“I’m kind of limited in what I can say about the lawsuit in general, but I can at least say that we have also read the lawsuit and we dispute their allegations,” Moore told the newspaper.
Moore, who became CEO in January following the departure of former CEO Marsha Majors, said U.S. Eagle expects to file its response later this month.
“We think we have a strong legal defense, and we look forward to presenting that defense and the facts at trial,” Moore said.
The allegations have not been established in court, and the credit union has not been found liable
Details of the Loan Transactions
According to the lawsuit, as reported by the Albuquerque Journal, the dispute involves commercial loans U.S. Eagle originated in December 2023 to two South Carolina companies.
The complaint alleges:
- $17.5 million: Approximate total amount U.S. Eagle loaned to the two companies.
- $14 million: Approximate portion of the loans guaranteed by the USDA.
- $5 million: Approximate amount of the loans purchased by Fidelity Bank in February 2024.
- $600,210: Premium Fidelity Bank paid when purchasing the loans, allegedly because of the federal guarantees and the perceived quality of the loans.
- $2.8 million: Damages Fidelity Bank is seeking in its lawsuit.
The Texas bank contends U.S. Eagle failed to disclose financial problems involving the borrowers before selling the loans, according to the newspaper.
U.S. Eagle officials declined to discuss specific loan details, citing restrictions on disclosure.
USDA Previously Removed CU From Lending Program
The lawsuit follows an earlier action by the USDA involving U.S. Eagle’s participation in the agency’s Rural Development OneRD Guaranteed Lending Program.
In May, the USDA removed U.S. Eagle and nine other lenders from the program, which provides federal guarantees intended to encourage financial institutions to extend credit to businesses in rural communities.
According to a May 13 Albuquerque Journal report citing a USDA announcement, the 10 lenders collectively accounted for approximately $620 million in delinquent loans, representing about 47% of Rural Development’s total delinquent loans.
The USDA action was intended to address those delinquencies and reduce financial exposure under the program.
Moore told the Albuquerque Journal that U.S. Eagle has appealed its removal and is working with the USDA toward a settlement.
He said he expects a positive resolution soon.
Failed Bank Acquisition Also Cited
The lawsuit also connects the loan sales to U.S. Eagle’s unsuccessful attempt to acquire Albuquerque-based Southwest Capital Bank.
According to the Albuquerque Journal, Fidelity Bank alleges U.S. Eagle sold the loans to raise capital for the proposed acquisition.
The bank acquisition was abandoned in July 2025 after Southwest Capital raised concerns about U.S. Eagle’s financial losses.
Moore rejected the suggestion that the USDA lending activity was connected to the proposed acquisition.
“The two were completely separate,” Moore told the newspaper. “We had been participating in this loan program long before we ever even entertained a conversation with Southwest Capital.”
U.S. Eagle also closed its cannabis banking division, the Aery Group, in August. Moore previously attributed that decision to consolidation among smaller cannabis businesses and increased competition from other financial institutions.
Credit Union’s Financial Position
U.S. Eagle, which serves nearly 100,000 members in New Mexico, reported approximately $1.46 billion in assets as of June 30, 2026, according to financial data derived from its regulatory filings.
Those figures also showed:
- Total loans and leases of approximately $1.05 billion.
- Net worth of approximately $113.8 million.
- A net worth ratio of 7.8%, placing the credit union in the well-capitalized category.
- Approximately $72.9 million in loans delinquent by 60 days or more.
Moore told the Albuquerque Journal that U.S. Eagle maintains a strong consumer lending portfolio consisting primarily of home, auto and personal loans.
The lawsuit remains pending in the U.S. District Court for the District of New Mexico. The publicly available docket identifies U.S. Magistrate Judges Laura Fashing and John F. Robbenhaar as assigned to the case.
