Net Worth at Southern Pine CU Falls by Almost 70 Percent During Q2

Conserved Southern Pine Credit Union (Valdosta, GA) reported an almost 70 percent decline in its net worth during the second quarter of 2020.

Net worth fell from $8.56 million as of March 2020 to almost $2.62 million as of June 2020. The credit union's net worth ratio tumbled from 18.43 percent to 6.23 percent during the same time period.

The $42 million credit union recorded a loss of $5.94 million for the second quarter. Year-to-date, the credit union had a loss of approximately $6.4 million. Most of the second quarter loss can be attributed to $5.82 million in miscellaneous operating expenses.

The credit union's year-to-date return on average assets was negative 27.34 percent as of June 2020.

The credit union was placed into conservatorship on June 11, 2020.

Southern Pine CU Conserved

The National Credit Union Administration (NCUA) placed Southern Pine Credit Union (Valdosta, GA) in conservatorship on June 11.

The decision to place Southern Pine Credit Union into conservatorship was due to unsafe and unsound practices at the credit union.

The credit union had approximately $46.4 million in assets.

The action to conserve the credit union was taken in consultation with the Georgia Department of Banking and Finance.

Read the press release.

Conserved Tennessee CU Is Insolvent as of March 31, 2020

At the end of the first quarter, Mid East Tennessee Community Credit Union (Decatur, TN) was insolvent.

The National Credit Union Administration placed the $10 million credit union into conservatorship on April 23, 2019.

The credit union's net worth was negative $134,539, as of March 31, 2020. It net worth ratio was minus 1.34 percent. The credit union has been critically undercapitalized based upon Call Report information since June 2019.

The credit union posted a loss of $154,819 for the first quarter of 2020, after recording a loss of almost $734 thousand for 2019.

The credit union reported that 3.55 percent of its loans were delinquent or $216,866 of loans were 60 days or more past due.

The credit union reported an annualized net charge-off rate of 10.11 percent for the first quarter, as net charge-offs were $169,853 for the first quarter of 2020. The credit union posted net charge-offs of almost $264 thousand for 2019.

NCUA in 2019 found that two former officials at the credit union had filed false Call Reports containing inaccurate financial information with the intent of manipulating the credit union's net worth ratio. Both individuals consented to orders of prohibition.

Number of Outstanding Enforcement Orders Fell in 2019

The National Credit Union Administration is reporting that outstanding enforcement orders against federally-insured credit unions fell in 2019.

Outstanding enforcement orders were 278 at the end of 2018. In comparison, outstanding enforcement orders at the end of 2019 were 227.

An enforcement order includes Preliminary Warning Letters (PWLs), Letters of Understanding and Agreement (LUAs), Cease and Desist Orders (CDOs), and Conservatorships.

The following table shows the number of outstanding enforcement orders by type for state chartered credit unions and federal credit unions from 2014 through 2019.

Labor Union Files Complaint Against Municipal Credit Union

A labor union has filed a complaint against Municipal Credit Union (New York, NY) with the National Labor Relations Board on January 16, 2020.

The Office & Professional Employees International Union, Local 153 alleged that Municipal Credit Union unilaterally repudiated or modified contracts of union members.

The labor union also accused the credit union of refusing to bargain or bargaining in bad faith.

The labor union represents 375 employees at Municipal Credit Union.

Municipal Credit Union was placed into conservatorship with the National Credit Union Administration on May 17, 2019.

Read more.

Municipal Credit Union Conserved

The New York State Department of Financial Services (DFS) on May 17th took possession of Municipal Credit Union (MCU), located in New York City, and appointed the National Credit Union Administration (NCUA) as conservator.

“DFS is taking possession of MCU and appointing the NCUA as conservator in order to continue the close joint DFS/NCUA monitoring of the credit union’s condition, operations, and controls, to ensure that member funds are protected and that member services continue without interruption,” Acting Superintendent Lacewell said.

In 2017 DFS had uncovered deficiencies in board oversight that had facilitated the multi-million-dollar embezzlement by the former CEO, Kam Wong. Wong was charged by the Manhattan U.S. Attorney with embezzlement and banned from the credit union industry by the NCUA in May 2018. He pleaded guilty to embezzling nearly $10 million from MCU in November 2018.

The Department removed MCU’s Supervisory Committee in May 2018, and its board of directors in June 2018 due to severe deficiencies in their oversight of the over-all management of the affairs of the credit union and designated an on-premises Administrator to oversee the general management of the credit union. Based on ongoing supervision by DFS and NCUA, DFS made the decision today to appoint NCUA as conservator and terminate the Administrator’s engagement.

Municipal Credit Union has more than $3 billion in assets.

Read DFS press release.

Read the NCUA press release.

Mid East Tennessee Community CU Conserved

The National Credit Union Administration on April 23 placed Mid East Tennessee Community Credit Union in Decatur, Tennessee, into conservatorship.

Mid East Tennessee Community Credit Union is a federally insured, state-chartered credit union with 1,855 members and assets of $12,093,966, according to the credit union’s most recent Call Report.

The credit union at the end of 2018 reported that 4.45 percent of its loans were 60 days or more past due and a net charge-off rate of 2.66 percent.

Read the press release.

Conserved Ukrainian Future CU Merged

Ukrainian Future Credit Union (Warren, MI) has merged into Selfreliance Ukrainian American Federal Credit Union (Chicago, IL) on August 17.

Ukrainian Future CU was placed into conservatorship on February 23, 2018.

The Michigan Department of Insurance and Financial Services and the National Credit Union Administration decided that merging Ukrainian Future Credit Union into Selfreliance Ukrainian American Federal Credit Union was in the best interests of the members.

At the time of the merger, Ukrainian Future Credit Union was a federally insured, state-chartered credit union with 3,652 members and assets of $77.9 million. Selfreliance Ukrainian American Federal Credit Union served 20,359 members and had assets of $485.9 million.

Read the press release.

Outstanding Enforcement Actions, 2010 - 2017

In the National Credit Union Administration's 2017 Annual Report, the agency reported outstanding enforcement actions against federally insured credit unions fell from 306 in 2016 to 296 in 296.

Enforcement actions include Preliminary Warning Letters, Letters of Understanding and Agreement (both published and unpublished), Cease and Desist Orders, and Conservatorships.

The following table provides information on the number of outstanding enforcement actions by type of action for both state chartered credit unions (SCCU) and federal credit unions (FCU) between 2010 and 2017.

Beverly Bus Garage FCU Conserved

The National Credit Union Administration (NCUA) on March 14 placed Beverly Bus Garage Federal Credit Union, in Chicago, Illinois, into conservatorship.

The NCUA placed Beverly Bus Garage Federal Credit Union into conservatorship because of unsafe and unsound practices at the credit union.

The credit union had a net worth ratio of 41.92 percent, according to its most recent Call Report. However, the credit union at the end of 2017 had a delinquency rate of 5.96 percent and net charge-off rate of 5.26 percent -- both measures were well above their peer average.

Beverly Bus Garage Federal Credit Union is a federally insured credi union with 1,300 members and assets of $4,029,521.

This is the second credit union to be placed into conservatorship this year.

Read the press release.

Ukrainian Future CU Placed into Conservatorship

The Director of the Michigan Department of Insurance and Financial Services placed Ukrainian Future Credit Union, of Warren, Michigan, into conservatorship and appointed the National Credit Union Administration as conservator.

The Michigan Department of Insurance and Financial Services placed Ukrainian Future Credit Union into conservatorship because of unsafe and unsound practices at the credit union.

Ukrainian Future Credit Union is a federally insured, state-chartered credit union with 5,692 members and assets of $84.6 million, according to the credit union’s most recent Call Report.

Read the NCUA press release.

Read the Michigan Department of Insurance and Financial Services press release.

Conserved North Dakota CU Merged

Citizens Community Credit Union (Devils Lake, ND) merged with First Community Credit union (Jamestown, ND) on January 1, 2018.

The National Credit Union Administration placed Citizens Community Credit Union into conservatorship on June 23, 2017.

The combined entity will have almost $800 million in assets.

Read the merger FAQ.

Louisville Metro Police Officers CU Placed into Conservatorship

The National Credit Union Administration (NCUA) placed Louisville Metro Police Officers Credit Union, in Louisville, Kentucky, into conservatorship on December 15th.

The NCUA placed Louisville Metro Police Officers Credit Union into conservatorship to allow the credit union to continue regular operations with experienced management in place and to correct operational weaknesses.

Various news outlets are reporting that the Federal Bureau of Investigation is investigating possible theft-related incident at the credit union.

Louisville Metro Police Officers Credit Union is a federally insured, state-chartered credit union with 3,564 members and assets of $28,759,623, according to the credit union’s most recent Call Report.

Read the press release.

Bad Loans Push Conserved Riverdale CU Deeper into Insolvency

Massive losses from poor performing loans have pushed conserved Riverdale Credit Union (Selma, AL) deeper into insolvent as of September 2017. performing loans.

The credit union posted a year-to-date loss of $14.3 million, driven by provision for loan and lease losses of $15.6 million through the first 3 quarters of 2017.

As a result of the loss, the credit union's net worth has dropped from almost $8.9 million to a negative $6.1 million.

The credit union's net worth ratio fell from 12.21 percent as of the end of 2016 to minus 11.05 percent as of September 2017.

Delinquent loans rose from $1.6 million at the end of 2016 to $7.1 million at the end of the third quarter 2017. The delinquency rate as of September 2017 was 14.33 percent.

As of September 2017, net charge-offs were $12.8 million. The net charge-off rate was 30.61 percent as of the most recent call report.

Total assets of the credit union have dropped by almost 25 percent from the start of this year to $54.9 million as of the most recent call report. However, the credit union's assets are now less than its total deposits and shares of $57 million.

Surprisingly, the credit union is reporting almost $1.4 million in uninsured deposits and shares.

Eight Lawmakers Write NCUA over Melrose's Treatment of Taxi Medallion Borrowers

Crain's New York Business is reporting that eight New York Democratic lawmakers wrote National Credit Union Administration (NCUA) Chairman McWatters urging the agency to review its treatment of taxi medallion loans originated by Melrose Credit Union, which is in conservatorship.

The letter stated that NCUA was unfairly punishing taxi medallion borrowers, who "through no fault of their own", were adversely impacted by the disruption of the taxi industry by riding sharing apps.

The letter urges the agency "to work with medallion owners, on a case-by-case basis, and to cease the practices of doubling interest rates, demanding homes be offered as additional collateral, refusing loan assumptions by willing third-parties, and requiring additional guarantors such as spouses be added to loans."

The letter was signed by Representatives Grace Meng, Joseph Crowley, Adriano Espaillat, Carolyn Maloney, Gregory Meeks, José Serrano, Nydia Velázquez, and Hakeem Jeffries.

Read the story (letter appears at the end of the story).

Shreveport FCU Closed, Members and Most Shares and Loans Assumed by Red River Employees FCU

The National Credit Union Administration on October 2 liquidated Shreveport Federal Credit Union of Shreveport, Louisiana.

Red River Employees Federal Credit Union of Texarkana, Texas, immediately assumed Shreveport Federal Credit Union’s membership and most shares, loans, and other assets.

Red River Employees Federal Credit Union serves 84,093 members and has assets of $807,144,475, according to the credit union’s most recent Call Report.

On April 13, NCUA placed the credit union into conservatorship. NCUA made the decision to liquidate Shreveport Federal Credit Union and discontinue its operations after determining the credit union was insolvent and has no prospect for restoring viable operations. As I pointed out earlier, Shreveport Federal Credit Union was critically undercapitalized with a net worth ratio of negative 1.68 percent.

At the time of liquidation and subsequent purchase by Red River Employees Federal Credit Union, Shreveport Federal Credit Union served 22,212 members and had assets of approximately $86 million, according to the credit union’s most recent Call Report.

Shreveport Federal Credit Union is the third federally insured credit union liquidation in 2017.

Read the press release.

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Two Conserved CUs Have Wiped Out Their Net Worth

Riverdale Credit Union (Selma, AL) and Shreveport Federal Credit Union (Shreveport, LA), which were placed into conservatorship during the second quarter, are critically undercapitalized and have wiped out their net worth.

Shreveport Federal Credit Union

Shreveport Federal Credit Union with almost $86.7 million in assets saw its net worth fall from slightly more than $15.4 million at the end of 2016 to nearly -1.5 million as of June 2017. As a result, the credit union's net worth ratio fell from 14.65 percent at the end of 2016 to -1.68 percent as of June 30, 2017.

The decline in net worth was due to large losses incurred by the credit union. The credit union reported a loss of negative $17.1 million through the first two quarters of 2017. Most of the loss was due to $14.9 million in other non-operating expenses.

The credit union is also reporting other comprehensive income of almost minus 2.2 million. The credit union has negative equity capital just shy of minus $3.7 million.

Riverdale Credit Union

Riverdale Credit Union with $63.1 million in assets reported a loss of almost $10.5 million through the first six months of 2017.

The loss was due to a dramatic increase its provisions for loan and lease losses during the first six months of 2017. Provisions for loan and lease losses were almost $11.5 million as of June 2017. In comparison, provisions for loan and lease losses were $761.6 thousand a year earlier.

The loss wiped out the credit union's net worth, which fell from almost $8.9 million at the end of 2016 to minus $1.6 million at the end of the second quarter of 2017. The credit union's net worth ratio tumbled from 12.21 percent at the end of 2016 to negative 2.56 percent as of June 2017.

In addition, the credit union recorded a sharp increase in delinquent and charged off loans. The credit union reported having $7.7 million in delinquent loans at the end of the second quarter of 2017. As a result, 13.80 percent of its loans were 60 days or more past due.

Net charge-offs were almost $6.9 million for the first two quarters of 2017. The credit union reported a net charge-off rate of 23.45 percent for the first two quarters of 2017.

According to the Administrative Order, the NCUA Board determined that conservatorship was necessary because the credit union concealed books, papers, records, and assets of Riverdale Credit Union, and evidence exists of illegal and unsafe practices and NCUA staff cannot determine the full ramification of this activity.

LOMTO Federal Credit Union Placed into Conservatorship

The National Credit Union Administration (NCUA) on June 26th placed LOMTO Federal Credit Union in Woodside, New York, into conservatorship.

NCUA placed LOMTO Federal Credit Union into conservatorship because of unsafe and unsound practices at the credit union.

The credit union's financial performance has been battered by bad taxi medallion loans due to the disruption of the taxi industry by ridesharing companies such as Uber and Lyft.

Read my blog post from May 10 on LOMTO FCU's financial performance through the first quarter of 2017.

LOMTO Federal Credit union has 2,958 members and $236,468,882 in assets, according to the credit union’s most recent Call Report.

​This is the third New York City taxi medallion lending credit union to be seized by regulators.

Melrose Credit Union was placed into conservatorship earlier this year and Montauk was seized in 2015 and merged into Bethpage FCU in 2016.

Read the press release.

NCUA Conserves Citizens Community CU

The National Credit Union Administration (NCUA) on June 23 placed Citizens Community Credit Union, located in Devils Lake, North Dakota, into conservatorship.

NCUA placed Citizens Community Credit Union into conservatorship because of unsafe and unsound practices at the credit union.

Citizens Community Credit Union posted a loss of $933,194 during the first quarter of 2017 due to provisions for loan losses of $978,000. A year earlier provisions for loan and lease losses were zero.

While the credit union was well-capitalized at the end of the first quarter, the credit union reported that 6.79 percent of its loans were 60 days or more past due. Delinquent loans were $10.8 million. Early delinquencies (loans 30 to 59 days past due) were almost $5.9 million.

Citizens Community Credit Union appears to be under-reserved with a coverage ratio (allowances for loan and lease losses to delinquent loans) of 27.47 percent.

Citizens Community Credit Union is a federally insured, state-chartered credit union with 11,399 members and assets of $201,255,973, according to the credit union’s most recent Call Report.

Read the press release.

Riverdale Credit Union Conserved

The Alabama Credit Union Administration today placed Riverdale Credit Union, in Selma, into conservatorship and appointed the National Credit Union Administration (NCUA) as agent for the conservator.

The Alabama Credit Union Administration and NCUA placed Riverdale into conservatorship because of unsafe and unsound practices at the credit union.

The credit union was well-capitalized at the end of the first quarter of 2017 and had an annualized return on average assets of 3.88 percent. The credit union reported that 3.69 percent of its loans were 60 days or more delinquent. Net charge-offs as a percent of average loans was 1.88 percent.

Riverdale has 12,433 members and $76,181,951 in assets, according to the credit union’s most recent Call Report.

Read NCUA press release.