$745 million NCUSIF loss from 6 CU failures through September, agency says

The federal regulator of credit unions said in a release Friday that the $744.9 million in loss to the credit union federal share insurance fund in the in the first three quarters of 2018, resulting from the liquidations of six credit unions, could be adjusted later based on the performance of remaining assets at the institutions.

The loss figure, for the National Credit Union Share Insurance Fund (NCUSIF), was initially disclosed during an open meeting Thursday of the National Credit Union Administration (NCUA) Board. NCUA’s release Friday provided the names of the six failed credit unions driving this loss.

At least two of the liquidated credit unions, both in New York, had suffered heavy losses due to their involvement in the failing taxicab medallion market: Melrose Credit Union (Briarwood, N.Y.) and LOMTO Federal Credit Union (Woodside, N.Y.). Each was the subject of a lengthy conservatorship.

Melrose Credit Union, liquidated Aug. 31, had $1.1 billion in assets and about 20,000 members; it had been in conservatorship since February 2017. The $6.1 billion Teachers Federal Credit Union, of Hauppauge, N.Y., assumed all of Melrose’s members and shares as well as “some loans and other assets,” NCUA said. (Note: Melrose Credit Union was originally chartered in 1922, NCUA said, and served “eligible members subject to the provisions of its bylaws, which could include any person upon approval for membership.”)

LOMTO Federal Credit Union, liquidated Oct. 1, had about $156 million in assets and 2,283 members; it had been in conservatorship since June 2017. Here too, Teachers Federal Credit Union assumed most of the institution’s members and most shares, “as well as some loans and other assets,” the agency said. The credit union was started in 1936 by taxi owners.

The other four liquidations noted by NCUA included:

  • St. Elizabeth’s Credit Union (Chicago, Ill.), liquidated Jan. 30. The credit union had $140,000 in assets and fewer than 200 members; NCUA said at the time that most members, assets and loans were assumed by Northstar Credit Union of Warrenville, Ill.
  • First Jersey Credit Union (Wayne, N.J.), liquidated Feb. 28. This credit union had nearly $86 million in assets and more than 9,000 members. NCUA said most of the credit union’s assets and loans, and all of the members’ shares, were assumed by USALLIANCE Federal Credit Union of Rye, N.Y.
  • Louisville Metro Police Officers Credit Union (Louisville, Ky.), liquidated July 2. The institution had about $20 million in assets and 3,300 members. NCUA said the closed credit union’s membership, shares, loans, and all other assets were assumed by Commonwealth Credit Union (Frankfort, Ky.).
  • Greater Christ Baptist Church Credit Union (Detroit, Mich.), liquidated July 31. The credit union had $608,330 in assets and 396 members at the time of its last call report, NCUA said. No purchase or assumption was reported.

NCUA, in its release, said it “continues to evaluate all courses of action that will maximize potential recoveries from the assets of the liquidated credit unions and minimize losses to the Share Insurance Fund. The fund has sufficient equity and reserves to cover anticipated losses.”

A seventh liquidation, which will be counted for the fourth quarter (and thus not on NCUA’s list of closures through Sept. 30), involved the Radio, Television and Communication Federal Credit Union in Staten Island, N.Y. Chartered in 1964, the credit union was liquidated this Oct. 12. It had last reported having $3 million in assets and 416 members. NCUA said most of its assets and all of its members, shares, and loans were assumed by Palisades Federal Credit Union of Pearl River, N.Y.

[During the Nov. 15 briefing of the board, staff said the NCUSIF as of Sept. 30 had reserves of $156.2 million. Of that, $47.4 million was allocated for specific cases, and the rest was general reserves.]

Six Credit Union Failures Through Sept. 30