ALEXANDRIA, Va.–A new report from NCUA’s Inspector Generalidentifies the causes of more than $7 million to the National Credit Union Share Insurance Fund as the result of events at two separate credit unions.
In Pennsylvania, years of weak internal controls, inadequate board oversight and fraudulent activity by a credit union manager led to the collapse of Copper & Glass Federal Credit Union and an estimated $2.89 million loss to the National Credit Union Share Insurance Fund, according to a new report from the National Credit Union Administration’s Office of Inspector General.
The Sept. 24 report, issued by Acting Inspector General Marta Erceg, found that the Glassport, Penn.-based credit union became insolvent after discovering approximately $3.5 million in fraudulent credit card balances linked to its former manager.
The manager allegedly exploited exclusive access to a third-party credit card servicing system to increase credit limits on accounts belonging to herself and her spouse.
The findings are contained in the OIG’s six-page report, “Limited Review of Copper & Glass Federal Credit Union,” identified as OIG-26-10.
Problems Identified Years Before Failure
According to the report, NCUA examiners had repeatedly identified deficiencies in the credit union’s operations beginning in 2021, including poor recordkeeping, inaccurate quarterly call reports, questionable cash counts and inadequate internal controls.
Those problems continued through four subsequent examinations, despite formal warnings from regulators.
Among the findings:
- 2021: Examiners identified material concerns involving recordkeeping, cash counts and reporting errors.
- 2022: An examination found that a teller had violated policies prohibiting employees from conducting transactions on their own accounts or those belonging to relatives.
- 2024: Despite the earlier violations, the credit union’s board promoted that teller to manager.
- November 2025: NCUA examiners uncovered significant credit card fraud involving the manager, who was subsequently terminated.
- December 2025: The credit union wrote off approximately $3.5 million in fraudulent balances, leaving it insolvent.
The OIG said the credit union’s board lacked the knowledge and capabilities necessary to provide effective oversight.
Examination reports from 2021 through 2025 repeatedly documented negative earnings, inaccurate financial reporting and deficient internal controls, according to the report. Problems either remained unresolved or reappeared in subsequent examinations.
Warning Signs Prompted Investigation
Thereport said a corporate credit union that maintained accounts for Copper & Glass alerted the NCUA in late 2025 that the institution had frequently overdrawn its transaction account and exhausted a line of credit that had been increased from $300,000 to $500,000.
Those concerns prompted an investigation by the NCUA’s regional Division of Special Actions on Nov. 6, 2025.
During an examination of credit card files, regulators discovered that the manager had sole access to the credit card servicing system and had used that access to manipulate credit limits on personal accounts.
The NCUA placed Copper & Glass into conservatorship Nov. 18, 2025.
OMEGA Assumes Operations
On April 1, 2026, the NCUA involuntarily liquidated Copper & Glass and entered into a cash-assisted purchase and assumption agreement with OMEGA Federal Credit Union.
OMEGA immediately assumed Copper & Glass’ assets, member shares and loans.
Copper & Glass, which was chartered in 1938, reported approximately $7.15 million in assets as of Sept. 30, 2025.
The NCUA approved financial assistance to address the failed institution’s accumulated deficit, resulting in an estimated $2,890,428 loss to the Share Insurance Fund.
The OIG concluded that inadequate internal controls were the primary factor allowing the insider fraud that ultimately caused the institution’s insolvency.
Despite the magnitude of the fraud and the history of examination findings, the inspector general determined that no unusual circumstances warranted a more extensive investigation.
The review included examinations of supervisory records, interviews with NCUA personnel and assessments of the credit union’s regulatory ratings and supervisory history.
The OIG conducted its fieldwork between June and August 2026.
Separate Cannabis-Related Failure Cost Fund $4.24M
The OIG also issued a separate report on June 26 examining the failure of North Bay Credit Union in Santa Rosa, Calif., where an expansion into marijuana-related commercial lending and financial technology services contributed to financial distress.
That report found that poor underwriting, inadequate monitoring of a credit union subsidiary, deficient Bank Secrecy Act controls and problems with a core conversion helped produce a $4.24 million loss to the Share Insurance Fund.
North Bay ultimately entered into an assisted merger Corporate America Family Credit Union.
The inspector general also noted that marijuana’s continued illegality under federal law complicated the NCUA’s supervisory options, even though the business was permitted under California law.
