Creation of Local Entity Failing when not user in sysadmingroup

Creation of a local entity in a folder seems to be failing due to the system attempting to assign permissions to the entity which are not allowed by the user creating the entity.  The user has Admin privs on the folder (inherited) that the entity is being created in. 

There are no explicit permissions being assigned to these entities as far as we can tell, so we are a bit at a loss as to which permissions are triggering this error.

Users in the sysadmingroup do not have this issue.

I'm attaching the stack trace which is logged when this happens.  The UI returns the usual message related to the Hibernate transaction being closed.
Error creating local entity: , stem name: 'app:adminit:api:service:consumers', group extension: 'UCD_General_Library', group dExtension: 'UCD General Library', uuid: null, typeOfGroup: entity, Problem in HibernateSession: HibernateSession (333d0b92): notNew, notReadonly, READ_WRITE_NEW, activeTransaction, session (10c9553e), Problem in HibernateSession: HibernateSession (3f75ab72): notNew, notReadonly, READ_WRITE_NEW, activeTransaction, session (10c9553e), Problem in HibernateSession: HibernateSession (300ef3bb): new, notReadonly, READ_WRITE_NEW, notActiveTransaction, session (10c9553e), Problem saving group: app:adminit:api:service:consumers:UCD_General_Library, thread: c4742a7