NCUSIF Estimated Losses of $5.4 Million Between April 1, 2016 and September 30, 2016

The National Credit Union Administration Office of the Inspector General (OIG) reported that losses to the National Credit Union Share Insurance Fund (NCUSIF) between April 1, 2016 and September 30, 2016 were approximately $5.4 million.

In its Semi-Annual Report to Congress, the OIG provided estimates of NCUSIF losses and grounds for closing arising from the liquidation of one credit unions and emergency merger of another credit union.

Also, the OIG had contracted with Moss Adams LLP to conduct a Material Loss Review (MLR) regarding the failures of six federally insured credit union located in Bensalem and Chester, Pennsylvania. All six credit unions outsourced the management, recordkeeping, data processing, and maintenance of financial records to a third party provider, which allegedly caused each institution to fail. The MLR will: (1) determine the cause(s) of the credit unions’ failure and the resulting estimated $3.2 million loss to the Share Insurance Fund; (2) assess NCUA’s supervision of the credit unions; and (3) provide appropriate recommendations and suggestions to prevent future losses.