Total losses to credit unions’ federal share insurance fund due to credit union failures amounted to about $18.4 million from April through September, according to a recent inspector general semiannual report supplied to Congress.
The National Credit Union Administration (NCUA) Office of Inspector General (OIG) reported that since none of the individual failures cost the National Credit Union Share Insurance Fund (NCUSIF) more than $25 million, no material losses reviews were conducted.
However, the report shows two of the failed credit unions were closed due to fraud, something not noted in the agency’s press announcements on their closures.
For one, the OIG report says Aldersgate Federal Credit Union of Marion, Ill., was involuntarily liquidated July 1 at a cost to the NCUSIF of about $8 million. It says the credit union was liquidated “due to insolvency related to management’s fraudulent activities involving multiple loans and share accounts.”
The failure of Unilever Federal Credit Union of Englewood Cliffs, N.J., the report shows, was involuntarily liquidated at a cost to the NCUSIF about $8.4 million. “Two credit union employees hid borrowings and used them to conceal their fraudulent activity and mask the credit union’s true liquidity position,” the report says.
The other four failed credit unions listed for the period covered were:
- Eastern Kentucky Federal Credit Union, which cost the NCUSIF $1,471,759 (it says the credit union was merged with Commonwealth Federal Credit Union with a cash assistance);
- Soul Community Federal Credit Union, involuntarily liquidated just a short time after its chartering (and costing the NCUSIF $91,425);
- Butler Heritage Federal Credit Union, which cost the fund $192,525 (the credit union was liquidated with a purchase and assumption by Cincinnati Ohio Police Federal Credit Union); and
- Members First of Maryland Federal Credit Union, which cost the fund $230,520 (it was liquidated with a purchase and assumption by Aberdeen Proving Ground Federal Credit Union).
The previous OIG report to Congress, covering the six-month period ending March 31, says also that the failure of Total Community Action Federal Credit Union in March cost the NCUSIF a comparatively miniscule $5,379.85. This institution, the OIG reported, was merged with New Orleans Firemen’s Federal Credit Union.
NCUA OIG Semiannual Report to Congress (April 1-Sept. 30, 2025)
NCUA OIG Semiannual Report to Congress (Oct. 1, 2024-March 31, 2025)
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