CHARLOTTE, N.C. — NCUA this morning liquidated tiny Shepherd's FCU, a year-old community development credit union, in the latest sign of the difficulties facing small credit unions.

The start-up CDCU, the year's fourth credit union failure, was chartered in 2010 to serve employees of Unity, the Way of Holiness Christian Church here, but never topped $400,000 in assets, more than half of it non-member deposits.

The failure of the tiny CDCU, which was sponsored by the Neighborhood Church Coalition in Charlotte, is the latest sign of the difficult economic landscape for small credit unions, but especially for new charters.

The interest in starting new credit unions is so negligible that NCUA chartered just a single new credit unions last year, the fewest since inaction of the Federal CU Act in 1934. There were just three new credit unions chartered in 2010 and only two in 2009.

But the brevity of the CDCU's life was very unusual.

NCUA said it decided the liquidate the year-old credit union after determining it was insolvent and had no prospect for restoring viable operations.

Shepherd's FCU was the second credit union failure in as many days, following Friday's liquidation of Colorado's Saguache Community FCU, and fourth credit union failure so far in 2011.

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