Limited reviews of three credit unions that were merged with other institutions in 2025 and this spring – and which caused losses to the National Credit Union Share Insurance Fund (NCUSIF) – were released recently by the federal credit union regulator’s inspector general’s office.
The three credit unions – North Bay Credit Union (Santa Rosa, Calif.), Team Financial Federal Credit Union (Houston, Texas), and Teamsters Local 92 Federal Credit Union (Canton, Ohio) – were merged with cash assistance by the National Credit Union Administration and caused aggregate losses to the NCUSIF of about $5.7 million. The reviews were required to determine whether in-depth reviews were warranted; the Office of Inspector General (OIG) found they were not. (The reports note that none caused a loss great enough to require a material loss review.)
Review findings showed, among other things, the following:
- North Bay Credit Union: With about $118.9 million in assets, this credit union was merged into Alero Financial Credit Union this February. The OIG concluded that the related loss to the NCUSIF – a total of $4.24 million – resulted primarily from North Bay’s growth into higher-risk and complex business lines, including marijuana-related businesses and fintechs. The report says inadequate internal controls at the credit union “resulted in operational breakdowns, weak underwriting, and risk management, leading to a high concentration of poor-quality marijuana-related business loans.”
- Team Financial Federal Credit Union: Reporting about $4.3 million in assets, this credit union was merged into Cy-Fair Federal Credit Union in December. The related loss to the NCUSIF – $699,321 – is said to have resulted from Team Financial becoming critically undercapitalized and insolvent due to extensive operational and financial failures. The report cites weak internal controls, “including a lack of recordkeeping and insufficient segregation of duties due to a limited number of employees, two of whom were relatives.” It says this led to: (1) identified “level 2” fraud (briefly, one that threatens credit union viability, is likely to cause an NCUSIF loss, is pervasive to a credit union, or management or officials are potentially involved); (2) the credit union operating with a fictitious fidelity bond for 8 years; and (3) significant losses caused by multiple deficiencies with the credit union’s recordkeeping.
- Teamsters Local 92 Federal Credit Union: This $1.9 million-in-assets institution was merged into Seven Seventeen Credit Union in December. The related $787,148 loss to the NCUSIF resulted, the report says, from Teamsters becoming critically undercapitalized and insolvent due to extensive operational, financial, and governance failures. The report says Teamsters operated for an extended period with two employees, and it cites a composite CAMELS rating that is redacted from this public report. It notes “long-standing recordkeeping deficiencies, weak internal controls, … and numerous accounting errors that produced unreliable financial reporting and an inadequately funded allowance for loan losses” as well as “significant weaknesses” in the loan portfolio. It adds that while there were indicators of fraud, the credit union’s insolvency “stemmed from systemic operational failures.”
OIG-26-08 – North Bay Credit Union
OIG-26-07 – Team Financial Federal Credit Union
OIG-26-06 – Teamsters Local 92 Federal Credit Union
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