ALEXANDRIA, Va.–Total losses to credit unions’ federal share insurance fund due to failures by credit unions amounted to about $18.4 million from April through September, according to a new report sent to Congress by NCUA’s Office of Inspector General.
The OIG stated that since none of the losses to the National Credit Union Share Insurance Fund (NCUSIF) more than $25 million, no material losses reviews were conducted.
The OIG report was first reported by Regulatory Report.
“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,” Regulatory Report said.
Two Liquidations
As the CU Daily reported earlier and as the OIG report states, Aldersgate Federal Credit Union of Marion, Ill., was involuntarily liquidated July 1 at a cost to the NCUSIF of about $8 million. The agency said the credit union was liquidated “due to insolvency related to management’s fraudulent activities involving multiple loans and share accounts.”
In addition, Unilever Federal Credit Union of Englewood Cliffs, N.J. was involuntarily liquidated at a cost to the NCUSIF about $8.4 million, NCUA said.
“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 states.
Additional Failures
As Regulatory Report noted and as the OIG report stated, 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 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)
- 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).
