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Credit Union Failures Up Despite Overall Decline

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Mortgage Daily

                                                 December 31, 2015

Although the number of mortgage-related entities to close or fail this year fell to the lowest level in a decade, credit union failures increased.

On Thursday, the National Credit Union Administration announced that
First Hawaiian Homes Federal Credit Union was liquidated.

First Hawaiian was closed after it was determined that the credit union was insolvent and had no prospect for restoring viable operations.

The
Hoolehua, Hawaii, organization was chartered in 1937 to serve residents on the Island of Molokai. It had fewer than 1,400 members and just $3 million in assets.

First Hawaiian’s assets, deposits and most of its loans were assumed by Molokai Community Federal Credit Union.

Bethex Federal Credit Union was liquidated on Dec. 18 by the NCUA, which originally placed the Bronx, New York, entity into conservatorship on Sept. 18.

Control of
Yuma, Arizona-based A.E.A. Federal Credit Union was returned to its members by the NCUA on Dec. 18. The financial institution was originally placed into conservatorship in December 2010.

“Much of the credit for this success goes to the hard work of A.E.A.’s leadership team, credit union staff and the loyal membership,” NCUA Board Chairman Debbie Matz said in a news release. “Working collaboratively with the agency, they were able to bring A.E.A. through a conservatorship, stabilize the credit union and continue providing services to members.”

In Cleveland, 56-year-old Greater Abyssinia Federal Credit Union was liquidated by
the NCUA on Dec. 1. Just 425 members were served by Greater Abyssinia, which had less than $1 million in assets.

The regulator said Greater Abyssinia
was insolvent and had no prospect for restoring viable operations.

The NCUA reported on Nov. 20 that Helping Other People Excel Federal Credit Union was liquidated. The Jackson, New Jersey, credit union was thrust into conservatorship on Oct. 16.

In all, Mortgage Daily has reported on the demise of 14 credit unions this year — more than the 10 credit union failures in 2014 but fewer than in 2010, when the number peaked out at 22.

Bank failures sank to just eight this year from 18 in 2014. The rate of bank failures has plummeted compared to 2010, when there were 157.

Just three non-bank mortgage-related business closings and failures were tracked by Mortgage Daily for 2015 — the fewest since 2002’s two. Last year, there were 16 non-bank failures covered.

In all, mortgage-related entities — including non-banks and financial institutions — that were closed or failed this year totaled 25, down from 44 in 2014 and the fewest since 2005’s eight closings. The total peaked in 2009 at 235.

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