Member Accounts Remain Protected by the Share Insurance Fund
ALEXANDRIA, Va. (Feb. 3, 2016) – In the four months since Montauk Credit Union of New York, New York, was placed into conservatorship, the credit union has taken several steps to address financial and management issues affecting the safety and soundness of its operations.
Montauk is a federally insured, state-chartered credit union with assets of $162.1 million and 2,830 members, according to its year-end Call Report posted today. The New York State Department of Financial Services placed Montauk into conservatorship on Sept. 18, 2015 and appointed the National Credit Union Administration as conservator.
As of Dec. 31, Montauk reported a net worth of $2.8 million and a net worth ratio of 1.74 percent, which the Federal Credit Union Act classifies as critically undercapitalized. Total shares and deposits were $158.2 million. The allowance for loan losses increased from $5.5 million to $21.9 million during the quarter, and net loans were $143.8 million at the end of the quarter.
Among other steps taken during the conservatorship, Montauk worked with members, where appropriate, to address identified issues. As a result, the credit union has modified $60.6 million in loans. The credit union hired experienced loan workout specialists to assist with its collections process. The credit union also retained professional accounting guidance to determine the adequacy of its allowance for loan and lease losses.
During conservatorship, Montauk’s member services remain undisrupted so members can continue to conduct normal financial transactions, deposit and access funds, make loan payments and use shares.
Deposits at Montauk Credit Union remain protected by the National Credit Union Share Insurance Fund. Administered by NCUA, the Share Insurance Fund insures individual accounts at Montauk Credit Union up to $250,000, and a member’s interest in all joint accounts combined is insured up to $250,000. The Share Insurance Fund also separately protects IRA and KEOGH retirement accounts up to $250,000.
The Share Insurance Fund has the backing of the full faith and credit of the United States. No member of a federally insured credit union has ever lost a penny of insured savings.