Dedicated to Deposits: Deals, Data, and Discussion

Credit Union Liquidation without the NCUA

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There was a credit union liquidation last Friday that I had missed. The NCUA wasn't involved since the credit union only had private share insurance via the American Mutual Share Insurance Corporation (ASI). Here's an excerpt from the ASI press release:
October 23, 2009 - Dublin, OH – American Mutual Share Insurance Corporation, or ASI, today accepted appointment as liquidating agent of Cumorah Credit Union, in Henderson, Nevada, following the Nevada Division of Financial Institution’s decision to close the credit union effective with the close of business October 23, 2009.

Credit Union 1, of Rantoul, Illinois purchased all of Cumorah Credit Union’s assets and loans and assumed all of its shares, enabling Cumorah’s members to continue to receive uninterrupted credit union service. Cumorah Credit Union’s declining financial condition led to the closure and subsequent purchase and assumption by Credit Union 1. Cumorah Credit Union had $147 million in assets and served 15,000 members in Nevada as of the date of the appointment.

Credit Union 1 is also an ASI-only credit union with no federal NCUA insurance. According to the press release, Credit Union 1 assumed all of the share deposits so it appears no member lost any money.

In this September post I described how a Texas credit union, Velocity Credit Union, is trying to switch to ASI insurance. The credit union management hopes to reduce cost. They mention ASI's succesful history, but as I mentioned in the post, there's at least one large ASI-only credit union that's having financial difficulty. I've updated this Velocity Credit Union post with a status from the credit union on the conversion.

Thanks to the reader who emailed me news of this closure.

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Comments
3 comments.
Comment #1 by Anonymous posted on
Anonymous
I love the last two lines of the press release (in underlined all caps):

MEMBERS’ ACCOUNTS ARE NOT INSURED OR GUARANTEED BY ANY GOVERNMENT OR GOVERNMENT-SPONSORED AGENCY.

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Comment #2 by Anonymous posted on
Anonymous
I also thought this part was interesting: "Cumorah Credit Union is open to LDS Church members residing in Clark, Lincoln and Nye Counties, Nevada."

1