The first credit union failure in 2020 was announced Friday by the federal credit union regulator – and the third federally insured financial institution to fail this year so far – as the agency took action to shutter a $7.7 million Pennsylvania institution.
The National Credit Union Administration (NCUA) in a late Friday release said it had closed IBEW Local Union 712 Federal Credit Union (FCU) of Beaver, Pa. The agency said that West Penn P&P FCU (also of Beaver) assumed IBEW Local’s assets, member shares, and loans.
Prior to the credit union failure, two banks failed earlier this year as announced by the Federal Deposit Insurance Corp. (FDIC) in separate announcements.
The agency said IBEW Local, according to its most recent call report, had 2,935 members and assets of about $7.7 million. The credit union was chartered in 1964 and served members of the local IBEW union. The agency did not provide an estimate of a cost to the National Credit Union Share Insurance Fund (NCUSIF), the federal fund that protects savings in most credit unions. The NCUA administers the NCUSIF.
The assumption of IBEW Local’s assets by West Penn will increase the latter’s assets by 50% and more than double its membership. NCUA said, according to its most recent call report, West Penn counted 2,150 members and held assets of about $14.8 million.
Two banks have failed in 2020 so far: The First State Bank of Barboursville, W.V. (April 3) and Ericson State Bank of Ericson, Neb. (Feb. 14). The former held $152.4 million in assets. The FDIC estimated that the closure cost its Deposit Insurance Fund (DIF) $46.8 million. The latter bank held nearly $101 million in assets; the FDIC estimated the closing would cost the DIF $14.1 million.