ALEXANDRIA, Va. — The various offices of NCUA working to resolve credit union failures typically diverge on the estimated costs—sometimes widely—to the National CU Share Insurance Fund, according to a new report issued this morning by NCUA's Office of the Inspector General detailing for the first time losses attributed to more than two dozen failures in 2011 and 2012.
The new report shows that NCUA's Region Five originally projected losses from the 2012 failure of Telesis Community CU at as much as $255 million, but the actual losses turned out to be much less, around $72 million. In the 2011 collapse of BCT FCU, the agency's Region One office originally estimated a loss of just $431,000, which turned out to be much higher, $6.1 million.
The wide discrepancy for the failure of Telesis and others, according to the IG, can be attributed to timing differences and new information that is continually received by the regional offices, the Asset Management and Assistance Center, the Office of Consumer Protection and the Office of Examinations and Insurance, which causes the estimated loss amounts to frequently change.
The report shows that NCUA also expects losses of:
- $21.5 million for the 2011 failure of Orem, Utah's Family First FCU
- $13.75 million for the 2011 failure of Oakland, Calif., Municipal CU
- $7.4 million for the 2012 failure of Saguache County CU in Moffatt, Colo.
- $6.5 million for the 2011 failure of CD FCU in Concord, Calif.
- $5.1 million for the 2011 failure of Borinquen FCU in Philadelphia
- $3.7 million for the 2011 failure of OUR FCU in Eugene, Ore.
- $3.6 million for the 2012 failure of Eastern New York FCU in Napanoch, N.Y.
- $2.5 million for the 2011 failure of California Pacific FCU in Concord, Calif.
- $1.6 million for the 2011 failure of Hmong American FCU in St. Paul, Minn.
- $1.8 million for the 2011 failure of Salt Lake City's Utah Central CU
- $1.3 million form the 2011 failure of Mission San Francisco FCU
All of these failures were either involuntary liquidations, assisted mergers or purchase and assumption deals and are paid for by the NCUSIF, which is capitalized by all federally insured credit unions.
NCUA management told the IG that failure dates can, and do, change because of delays caused by data-processing issues. In addition, NCUA management said that liquidation dates can be revised depending on staffing availability or other unforeseen issues.
The IG recommended that NCUA develop an agency-wide definition for the term "failure date" for both federal- and state-chartered credit union involuntary liquidations, purchase and assumptions, and assisted mergers to ensure agency-wide consistency when reporting on when a credit union is actually considered to have failed.
NCUA management said it plans to adopt the recommendation.
