NCUA Seeking Merger Partners For Some Hurricane-Affected Credit Unions

Register now

NCUA said last week it is seeking to resolve as many as 10 credit unions in the Gulf area that have been irreparably damaged by hurricanes Katrina and Rita.

"Most of them are small," said Dennis Winans, head of the National CU Share Insurance Fund, reporting to the NCUA Board.

The largest one is a $13-million New Orleans credit union serving teachers. NCUA is currently searching for a merger-mate for that credit union and expects the insurance fund to lose as much as $5 million on that credit union. NCUA expects to merge or close the 10 credit unions at a cost of around $10 million, according to Winans.

Separately, Winans reported that the 128 credit unions impacted by the hurricanes saw a massive inflow of shares due to insurance payments and disaster relief. Those credit unions reported a total influx of $809 million in the fourth quarter, bloating assets and shrinking capital ratios for the period.

For reprint and licensing requests for this article, click here.