Seven failed credit unions in 2021 largest number in three years; losses were $5 million to federal fund

Seven credit unions failed in 2021, costing the federal credit union savings insurance fund more than $5 million, the agency that oversees the fund said Wednesday.

While the seven failures were the most in three years, figures released by the National Credit Union Administration (NCUA) showed, the losses to the National Credit Union Share Insurance Fund (NCUSIF) were lowest in four out of the five last years.

According to the agency, the seven credit unions held total assets of $47.1 million – the highest amount in the last three years, but still considerably lower than in 2017 and 2018, when total assets of failed credit unions were $181 million and $1.56 billion, respectively. In those two years, the total credit union failures were 10 and eight, with $24.3 million and $785 million in losses, both respectively.

The annual NCUSIF report also showed:

  • The “equity level” of the fund (the ratio of total reserves in the fund relative to total savings insured) was 1.26% at the end of 2021 – up from 1.23% at the end of the previous year.
  • The number of deeply troubled credit unions (those with examination ratings of 4-5) decreased to 129 at year’s end from 159 at the end of 2020. That continues a decline that began at year-end 2017, when total 4 and 5 CAMELS-rated credit unions were 196.
  • Credit unions in solid financial shape (CAMELS rated 1 and 2) held 97.5% of all credit union assets, continuing an upward trend that began in 2010.

Board Briefing, Share Insurance Fund Quarterly Report