While credit union membership is rising nationwide, several New England states have been bucking the trend.

Massachusetts, Rhode Island, and Connecticut were the biggest losers. Total credit union membership for those three states fell to 2.8 million in 1992, a 14.5% dive since 1989, according to statistics compiled by the Credit Union National Association, an industry trade group.

Nationwide, membership increased 5.5%, to 63.9 million during those years.

"I'd suspect the attrition is over by now," said William Hampel, the trade group's chief economist. "If the economy comes around, I have no reason to say it will continue."

New Hampshire's membership in 1992 was 293,000, down 0.5% from 1991, but up 0.07% from 1990. Maine and Vermont posted solid membership increases in the same period.

Hardest-Hit State

Rhode Island experienced the largest loss. In 1993 the Ocean State had 255,000 credit union members, down 11.4% from 1992 and 41.5% from 1991.

The decline can be largely attributed to the Jan. 1, 1991, failure of the Rhode Island Share and Deposit Indemnity Corp., a private insurance company that insured deposits of credit unions and cooperative banks.

In the fallout, four of the state's largest credit unions, unable to merge or get reinsured, were forced to liquidate.

Initially 30,000 people were stranded without access to $735 million in deposits. Currently $55 million of deposits belonging to 18,000 people remains frozen, said Anthony Somerfield of the Depositors Economic Protection Corp., which is managing the liquidation.

Another 53,000 people were struck from the rolls when Northeast Savings in Hartford, Conn., purchased assets of three Rhode Island credit unions.

|People Lost Faith'

Resentment against credit unions runs high, said Connie Thornton of Warwick, who still is awaiting a share of her deposits from the liquidation of Rhode Island Central Credit Union.

"A lot of people lost faith in credit unions," said Ms. Thornton, who founded Depositor Bailout Recovery Association, which claims 300 members. "A lot of people lost faith in any sort of financial institution."

Membership in Massachusetts credit unions was 1.7 million in 1992, down 3.2% from 1991 and 8.8% from 1990.

Unemployment a Factor

The recession was a major factor in the decline. The state's unemployment skyrocketed to 9% in 1991, when the national average was 6.8%.

"When somebody becomes unemployed sometimes it becomes harder to maintain a relationship with the credit union." said Robert Kimmett, spokesman for the Massachusetts CUNA Credit Union League.

The recession also spurred liquidations and mergers. Members were forced to seek relationships with other financial institutions.

Federal Groups Liquidated

Massachusetts felt ripples from the Rhode Island crisis, too. Not wanting to follow in their neighbors' footsteps, privately insured credit unions converted to federal insurance. Those that didn't qualify were liquidated or merged into other credit unions.

Also depleting the ranks in Massachusetts were the liquidations in 1990 and 1991 of several large federal credit unions, including Blue Hill Federal Credit Union and Wollaston Federal Credit Union, which together accounted for 62,000 members.

Frequently in liquidations and mergers, dual membership or overlaps would be struck from the books.

Connecticut Group Absorbed

In neighboring Connecticut times were just as tough. Membership in 1992 stood at 900,000, down 0.5% from 1991 and 4.5% from 1990.

In 1991, the 27,000-members of the troubled Community Service Credit Union in Groton, which served Navy and Coast Guard personnel and community groups, were swallowed by Navy Federal Credit Union of Arlington, Va. As in other out-of-state mergers, members of Community Service are now considered members of the Virginia credit union.

"They were not as strong as they wanted to be in reserves. it was questionable if they could continue," said Robert Foster, Navy's director of operations.

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