Material Loss Review on O.U.R. FCU

NCUA's Inspector General released a Material Loss Review on the failure of O.U.R. Federal Credit Union, a low-income credit union in Eugene, Oregon.

According to NCUA, the failure of O.U.R. FCU will result in an estimated loss to the National Credit Union Share Insurance Fund (NCUSIF) of $3.7 million. While the loss did not exceed the $25 million threshold, the Inspector General Office concluded that the circumstances surrounding the loss to the NCUSIF were unusual enough to warrant a review.

The IG report found that several factors contributed to the failure of O.U.R. FCU:

• Suspcious activity;
• Ineffective board oversight;
• Weak controls; and
• Inaccurate accounting.

The IG report was also critical of NCUA examiners noting that the agency missed the opportunity to prevent or reduce the loss to the NCUSIF, including incomplete examinations and ineffective resolution of issues raised during examiniations.

The report notes that the credit union was under a net worth restoration plan since March 2010. In addition, the credit union was issued a Letter of Understanding and Agreement (LUA) in August 2010, which specifically listed concerns and expectations related to record keeping, the debit card program, interest rate risk, and capital levels. Neither regulatory action was made public by NCUA.

Read the IG Report.