The federal agency which closed the Friendship House Community Federal Credit Union on Capitol Hill two weeks ago will begin today to pay off credit union members.

The credit union, at 536 8th Street SE, was ordered closed permanently Sept. 20 by the National Credit Union Administration. The administration regulates federally insecured credit unions.

The Friendship House credit union - which is independent of the antipoverty program agency of the same name - had been closed for 12 days prior to Sept. 20 for an audit by the administration. It never reopened.

The credit union, founded in 1965, had been serving about 2,000 families in the food stamp program, and provided savings and loan services to 2,300 members. The credit union had severe financial problems for the past several years, according to members of the board of directors.

In March, more than $337,000 in food stamps and cash were reported missing from the accounts of the credit union, according to the Department of Human Resources. The credit union sold food stamps on contract for DHR.

Special agents of the FBI and the U.S. Attorney's office have begun investigations into the missing food stamps and money. While acknowledging the investigations, spokesmen for the two agencies declined to discuss the case.

The credit union has not paid interest to members for more than 18 months, and more than 40 per cent of the credit union's outstanding loans were delinquent, according to board members.

When the administration shut down the credit union and seized the records two weeks ago, notices were posted on the doors and windows informing members that all accounts were insured up to $40,000 and that claim statements would be sent to them.

According to Robert marquette, the administration's agent for liquidation that is the usual procedure for settling claims when a federally-insured credit union is closed.

"Here, we were talking about processing a large volume of claims - more than 2,000 - and we were talking about people who need their money.

"So we decided to try this experiment to see if it saved us time. Obviously, this will help us get people their money faster," he said.

Marquette said that administration staff will be at the Friendship House credit union today through Saturday, Oct. 9 from 9 a.m. to 5 p.m. to pay off accounts.

Credit union members who had savings accounts there and who also were delinquents in their loans will have the loan payments deducted. Marquette said.

The administration will sell all loans, he said.

The administration's decision to pay off accounts on the spot should help allay the fears of people who had savings in the credit union. Marquette said.

The administration has posted new notices on the doors of the credit union telling people of the new payment policy. Radio spot announcements have also been purchased by the administration, according to Marquette.

After word spread that the credit union was closed, there was anger and fear expressed by credit union members. A community meeting for credit union members was hastily called last week, and members of the board of directors were invited to answer questions. Forty credit union members and one board member attended.

The board member, Edward Goode, told angry credit union members that no one would lose their savings and that the board had not been responsible for closing the credit union.

"We were told there was going to be an audit. The Thursday before the credit union was closed, the administration told us they were going to do it. By that time, there was nothing we could do," he said.

On woman said that she was attending the meeting - held at Friendship House - to represent her elderly mother.

"You all knew the credit union was in trouble. But twice when I asked my mother to take her money out and put it somewhere else, you all talked her out of doing it. That's just not right," she said.

Raymond Smith, another credit union member, said he was afraid that when the administration began to settle claims, their records wouldn't be correct.

"I've been getting statements of my account that I know aren't right," he said. Smith said that he hadn't been paying on hisloan at the credit union because the records were incorrect.

Other people at the meeting expressed fear about who would buy the loans from the administration and what the collection procedures would be.