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ALEXANDRIA, Va. (September 25, 2009) – The National Credit Union Administration (NCUA) today accepted appointment as liquidating agent of Clearstar Financial Credit Union, in Reno Nevada, following the Nevada Division of Financial Institution’s decision to close the credit union effective September 25, 2009.

United Federal Credit Union purchased and assumed Clearstar Financial Credit Union’s assets, loans and shares, enabling Clearstar’s members to continue to receive uninterrupted credit union service. Clearstar Financial Credit Union’s declining financial condition led to the closure and subsequent purchase and assumption by United Federal Credit Union. Clearstar Financial Credit Union had $144 million in assets and served 16,000 members.

United Federal Credit Union is a full service credit union and its new members will have access to a broad array of financial services offered throughout a wide service area. With assets of $941 million, United FCU serves approximately 78,000 members from employee and associational groups in various states throughout the country. The headquarters office is located at 2807 South State Street in St Joseph, Michigan. United Federal Credit Union has fifteen branch offices serving members throughout its service area. The credit union also offers online transaction service. 

 

Member accounts are insured to at least $250,000 by the National Credit Union Share Insurance Fund, a federal insurance fund backed by the full faith and credit of the U.S. Government. This is the 7th federally insured credit union liquidation in 2009.

Members Now Served by Security Service Federal Credit Union

ALEXANDRIA, Va. (October 1, 2009) – The National Credit Union Administration (NCUA) announces today that Security Service Federal Credit Union, of San Antonio, Texas, has purchased the assets and assumed the member shares of liquidated West Texas Credit Union of El Paso, Texas.

The Texas Credit Union Department liquidated West Texas Credit Union September 30, 2009, and discontinued its operation after determining the credit union was insolvent and has no prospects for restoring viable operations. At the time of liquidation, West Texas Credit Union had approximately $78 million in assets and served 25,000 members.

The Texas Credit Union Department chartered West Texas Credit Union in 1964 to serve State Employees in the West Texas Area. This is the 11th federally insured credit union liquidation in 2009.

These new Security Service Federal Credit Union members will continue to receive convenient, uninterrupted service. Security Service Federal Credit Union member accounts are insured up to at least $250,000 by the National Credit Union Share Insurance Fund (NCUSIF), an entity of the federal government operated by NCUA.

Security Service Federal Credit Union is a federally chartered, federally insured institution headquartered in San Antonio, Texas. Chartered in 1956 to serve United States Air Force Security Service Command employees, it is a full service, $5 billion credit union with more than 680,000 members located throughout the United States.

Second Baptist Church Credit Union Members Now Served by Prosperity Federal Credit Union; Member Accounts are Safe and Federally Insured

ALEXANDRIA, Va. (October 29, 2009) – The National Credit Union Administration (NCUA) was appointed liquidating agent of the Second Baptist Church Credit Union (Second Baptist) of Los Angeles by the California Department of Financial Institutions (DFI) on October 28, 2009.

Prosperity Federal Credit Union (Prosperity) of Rancho Domingue, California, formerly Shell Southwest Federal Credit Union, purchased and assumed Second Baptist loans and shares, which enables its 340 members to continue to receive uninterrupted credit union service. Established in 1955 to serve Second Baptist employees and members, the credit union was closed because it is insolvent. This is the 12th federally insured credit union liquidated in 2009. 

 

Prosperity Federal Credit Union has $14.4 million in assets and serves approximately 2,900 members. It is located at 2200 West Aratesia Blvd., Suite 206, Rancho Domingue, California. Member accounts are federally insured up to at least $250,000 by the National Credit Union Share Insurance Fund (NCUSIF).

Ensign Federal Credit Union Members Now Served by EDS Credit Union; Member Accounts are Safe and Federally Insured

ALEXANDRIA, Va. (November 13, 2009) – The National Credit Union Administration (NCUA) today closed Ensign Federal Credit Union of Henderson, Nevada, and authorized the purchase and assumption (P&A) of member share accounts by EDS Credit Union of Plano, Texas. 

 

The EDS Credit Union P&A enables Ensign Federal Credit Union members to continue to receive uninterrupted credit union service. Ensign’s declining financial condition led to the closure and subsequent P&A. Ensign Federal Credit Union had $98 million in assets and served 7,900 members. This is the 13th federally insured credit union liquidation in 2009. 

 

EDS Credit Union is a full service credit union and its new members will have access to a broad array of financial services offered throughout a wide service area. With assets of $772 million, EDS Credit Union serves approximately 57,000 members in various states throughout the country. The headquarters office is located at 5640 Democracy Drive in Plano, Texas. EDS Credit Union has 15 branch offices serving members throughout its service area. The credit union also offers online transaction service. 

 

Member accounts are insured to at least $250,000 by the National Credit Union Share Insurance Fund, a federal insurance fund backed by the full faith and credit of the U.S. Government.

HeritageWest Federal Credit Union Members Now Served by Chartway Federal Credit Union; Member Accounts are Safe and Federally Insured

ALEXANDRIA, Va. (December 31, 2009) – The National Credit Union Administration (NCUA) today liquidated HeritageWest Federal Credit Union of Tooele, Utah, and accepted Chartway Federal Credit Union’s offer to purchase and assume the credit union.

 

Chartway Federal Credit Union purchased and assumed HeritageWest Federal Credit Union’s assets, loans and shares, enabling HeritageWest members to continue to receive uninterrupted credit union service. HeritageWest Federal Credit Union’s declining financial condition led to its closure and subsequent purchase and assumption by Chartway Federal Credit Union. At closure, HeritageWest Federal Credit Union had $311 million in assets and served 40,000 members.

Chartway Federal Credit Union is a full service credit union and its new members will have access to a broad array of financial services offered throughout the United States. With assets of $1.2 billion, Chartway FCU serves approximately 154,000 members located throughout the country. Chartway has 52 branch locations in Arkansas, Florida, Georgia, New Jersey, North Carolina, Ohio, Rhode Island, Texas, and Virginia and also serves its members through nearly 4,000 shared service locations nationwide.

Member accounts are insured to at least $250,000 by the National Credit Union Share Insurance Fund, a federal insurance fund backed by the full faith and credit of the U.S. Government. This is the 15th federally insured credit union liquidation in 2009.

Members Now Served By Self-Help Federal Credit Union

ALEXANDRIA, Va. (January 8, 2010) – The National Credit Union Administration (NCUA) was today appointed liquidating agent of Kern Central Credit Union (Kern Central) of Bakersfield, California, by the California Department of Financial Institutions (DFI).

Self-Help has $75.2 million in assets and serves approximately 15,000 members. It is a full service credit union located in Durham, North Carolina. Self-Help will continue to operate Kern Central’s 3 branch locations. In addition, the new members will have access to a broad array of financial services offered across the United States through Self-Help’s six branch offices in California and a shared branching network with over 5,500 sites nationwide.

At liquidation, Kern Central had approximately $34.9 million in assets and served approximately 8,400 members. Kern Central was established in 1974 to serve employer groups within a 25-mile radius. The credit union subsequently expanded its field of membership to serve individuals working and living in Kern County, California. This is the first federally insured credit union liquidation in 2010.

Board Action Bulletin

The NCUA Board appointed Elizabeth Whitehead Region V Director.

The NCUA Board considered one supervisory matter that remains confidential at this time.

The NCUA Board considered two personnel matters that remain confidential at this time.

The NCUA tweets all open Board meetings live. Follow @TheNCUA (opens new window) on Twitter, and access Board Action Memorandums and NCUA rule changes at www.ncua.gov. The NCUA also live streams, archives and posts videos of open Board meetings online.

Board Action Bulletin

National Credit Union Share Insurance Fund report

 

NCUA’s Chief Financial Officer reported $78.4 million was added to NCUSIF reserves in December. The Fund’s reserve balance totaled $758.7 million for natural person credit unions at year-end 2009. NCUSIF reserves totaled $278.3 million at year-end 2008. The Temporary Corporate Credit Union Stabilization Fund (TCCUSF) reserve balance was $5.33 billion December 31, 2009.

 

Year 2009 ended with an NCUSIF equity ratio of 1.24 percent, somewhat lower than projected, based on higher than expected share growth in the nation’s federally insured credit unions and a higher than expected addition to loan loss reserves near year-end.

 

NCUSIF 2009 revenue and expense includes investment income of $188.8 million, premium income of $727.5 million, operating expense of $133.3 million, and insurance loss expense of $615.1 million. Through December 31, 2009, NCUSIF net income was $191.2 million.

 

Twenty-eight federally insured credit unions failed during 2009 with charges to reserves of $124.4 million — 16 involuntary liquidations (10 became purchase and assumptions) and 12 assisted mergers.

 

With a net increase of 80 institutions during 2009, there were 351 problem code credit unions at year-end 2009, with shares of $41.6 billion representing 5.82 percent of total insured shares. In comparison, 271 problem code credit unions held shares of $16.3 billion representing 2.70 of total shares at year-end 2008.

 

Posing additional concern to NCUA, currently there are 1,668 code 3 credit unions, an increase of 134 from year-end 2008. These institutions represent $98.6 billion, or 13.67 percent of total insured shares. Currently, nearly 20 percent of insured shares are held in troubled or stressed credit unions.

 

Chairman Debbie Matz emphasized that NCUA is diligently working to resolve the problems of code 4 and 5 credit unions and closely tracking code 3 credit unions. Striving to sustain and return these institutions to safe operating levels, supervision is being stepped-up to stem the tide of increased problems. NCUA examiners will be onsite to assist credit unions with signs of stress.

 

Redundant credit card rule amended

 

The NCUA Board withdrew the portion of the Unfair or Deceptive Acts or Practices (UDAP) rule, Part 706, created to prohibit unfair and deceptive acts and practices related to consumer credit cards to prevent unnecessary confusion for credit union regulatory compliance. Set to become effective in July 2010, the UDAP rule duplicates, overlaps, and in some provisions conflicts with the more recent Credit CARD Act of 2009 and new Regulation Z provisions, which become effective February 22, 2010.

 

Essentially, the Credit CARD Act of 2009 and new Regulation Z provisions limit and place requirements on the same credit card practices that were the focus of the UDAP Rule, including: limiting the ability of credit card issuers to raise interest rates, limiting fees on subprime credit cards, providing for fair allocation of payments and limiting late fees.

 

Under the Truth in Lending Act and Regulation Z, NCUA has enforcement authority for federal credit unions, and the Federal Trade Commission has authority for state-chartered credit unions.

 

Complying with an Office of Federal Register request, the withdrawal is effective July 1, 2010, the original effective date of the UDAP rule.

The NCUA tweets all open Board meetings live. Follow @TheNCUA (opens new window) on Twitter, and access Board Action Memorandums and NCUA rule changes at www.ncua.gov. The NCUA also live streams, archives and posts videos of open Board meetings online.