Economy Claims 10th Failed Credit Union of 2008

NCUA Steps in to Liquidate Assets of Small NJ Institution
Economy Claims 10th Failed Credit Union of 2008
Last week, amid all the flurry of news about the nation's stock market and investment banks, a small federal credit union in East Orange, N.J., was closed by the National Credit Union Administration (NCUA). Its closure brings the total to 10 credit unions closed this year - up from two in 2007. The FDIC lists 12 banks as failed thus far in 2008.

Interfaith Federal Credit Union was placed into liquidation by the NCUA on September 16. While it may not have the same earth-moving effect on the economy as, say, the Merrill Lynch buyout by Bank of America, the credit union did have 370 members and assets of about $338,000.

NCUA says it made the decision to liquidate Interfaith Federal Credit Union and discontinue its operation after determining the credit union to be insolvent, with no prospects of restoring viable operations. The institution, chartered in 1982 to serve members of the New Hope Baptist Church, was the 10th federally-insured credit union closure to happen this year, according to the NCUA.

Here's a list of the other nine credit unions that have been closed or placed into conservatorship by the NCUA in 2008. Some were taken over by other credit unions, others were closed and had their assets liquidated.

The Valley Credit Union, San Jose, CA was placed in conservatorship on September 3. The NCUA assumed control of the operations of the credit union that has $257 million in assets and 26,900 members. The credit union serves Alameda, Contra Costa and Santa Clara counties.

Port Trust Federal Credit Union was absorbed by CPM Federal Credit Union of North Charleston, S.C., on August 8. At the time of closing the credit union had 260 members and approximately $460,915 in assets.

NCUA liquidated Sterlent Credit Union, and Patelco Credit Union purchased and assumed its assets. Sterlent was located in Pleasanton, CA, and had $94.6 million in assets.

Meriden F.A. Federal Credit Union of Meriden, Connecticut was placed into liquidation by the NCUA on July 16. At time of liquidation the credit union had 206 members and assets of $337, 968.

On July 28 the National Credit Union Administration (NCUA) placed the New London Security FCU into liquidation. The New London, CT. credit union had 356 members and assets of $12.7 million in assets when it closed.

St. Luke Baptist Federal Credit Union of Laurelton, New York, was placed into liquidation on May 3 because it determined the credit union was insolvent. At the time of liquidation the credit union, served 162 members and had assets of approximately $49,734.

Father Burke Federal Credit Union of Bronx, New York, was placed into liquidation on May 12 due to insolvency. At the time of liquidation the credit union served 504 members and had assets of about $1.2 million.

NCUA selects Patelco Credit Union to absorb Cal State 9 Credit Union. Cal 9 had assets of $339 million and served nearly 29,000 members.

The NCUA approved Public Service Credit Union, Denver, Colorado purchase of assets and shares of Norlarco Credit Union, Ft. Collins, Colorado in January. Chartered in 1959, Norlarco has assets of more than $290 million, and serves over 42,000 members.

About the Author

Linda McGlasson

Linda McGlasson

Managing Editor

Linda McGlasson is a seasoned writer and editor with 20 years of experience in writing for corporations, business publications and newspapers. She has worked in the Financial Services industry for more than 12 years. Most recently Linda headed information security awareness and training and the Computer Incident Response Team for Securities Industry Automation Corporation (SIAC), a subsidiary of the NYSE Group (NYX). As part of her role she developed infosec policy, developed new awareness testing and led the company's incident response team. In the last two years she's been involved with the Financial Services Information Sharing Analysis Center (FS-ISAC), editing its quarterly member newsletter and identifying speakers for member meetings.

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