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2015 Credit Union Failures Exceed Bank Failures

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For the first time in eight years, more federally insured credit unions have been liquidated or placed into conservatorship than federally insured banks.

On Thursday, the
National Credit Union Administration reported the liquidation of SWC Credit Union in Tampa, Florida.

The financial institution had been placed into conservatorship by the Florida Office of Financial Regulation, which appointed the NCUA as conservator.

The credit union was chartered in 1941 and served employees of Sears Roebuck & Co. and their families. By the time it closed, it had just 309 members and nearly $2 million in assets.

“NCUA made the decision to liquidate SWC and discontinue its operations after determining the credit union was unable to restore viable operations,” the announcement said.

On Sept. 18, the
New York Department of Financial Services took possession of Montauk Credit Union and appointed the NCUA as conservator. The action was taken due to “unsafe and unsound practices.”

Normal operations will continue at Montauk as the NCUA works to resolve
issues affecting its operations.

New York-based Montauk, which was chartered in 1922, reports 2,893 members and $179 million in assets.

The same day Montauk was seized, the NCUA announced that it placed
Bethex Federal Credit Union into conservatorship. Experienced management has been put in place at the Bronx, New York, financial institution as the regulator moves to resolve issues affecting its safety and soundness.

The 45-year-old credit union had
5,584 members and nearly $13 million in assets.

Late last month,
the Iowa Credit Union Division placed SCICAP Credit Union into receivership, which was tendered to the NCUA. The state made the move after determining the credit union was insolvent with no chance of restoring viable operations on its own.

Community 1st Credit Union assumed most of the Chariton, Iowa, credit union’s
858 members and $2 million in assets.

In July, the NCUA announced that it liquidated Lakeside Federal Credit Union following a determination that the Hammond, Indiana, institution was insolvent and had no prospect for restoring viable operations.

Lakeside’s $9 million in assets were purchased by Teachers Credit Union, which also assumed its shares.
Lakeside was chartered in 1950 and had 2,280 members.

The regulator said earlier this month that control of Keys Federal Credit Union, which was placed into NCUA conservatorship in 2009, has been handed back to its members. The move follows a year when more than $1 million was earned by the Key West, Florida, entity. The net worth ratio was 5.75 percent as of June 30, 2015.

Keys FCU has 10,624 members and $121 million in assets.

“Although a long time in coming, the recovery of Keys Federal Credit Union is a great success story,” NCUA Chairman Debbie Matz said in the statement. “This remarkable recovery was made possible through the collaborative efforts of Keys’ management team and staff, its advisory board, NCUA staff, and the loyal members who stuck with their credit union through turbulent times.”

But the outcome wasn’t so good for New Bethel Federal Credit Union, which was placed into conservatorship earlier this year.

The NCUA said last month that the Portsmouth, Virginia, company was
voluntarily liquidated after a determination that it was unable to restore viable operations. The 37-year-old credit union had only 172 members and just $0.1 million in assets.

Mortgage Daily has tracked the demise of 11 credit unions so far this year.

Credit union failures now exceed the six federally insured bank failures so far during 2015. The last time credit union failures exceeded bank failures was in 2007, when there were just three banks that folded compared to seven credit union failures.

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