Merged New York CU Causes Share Insurance Fund Loss, OIG Report Shows
Branch 6000 CU, undercapitalized since 2020, was merged into Consumers FCU with cash assistance in Q3.
A New York credit union that was consolidated earlier this year because of its poor financial condition caused an estimated loss of $163,600 to the Share Insurance Fund, according to the NCUA’s Office of Inspector General’s Semiannual Report to the Congress.
“Branch Credit Union entered a merger with Consumers Federal Credit union with cash assistance,” the OIG’s report, released last month, said. “Branch Credit Union’s net worth was critically undercapitalized with no reasonable expectation of solvency due to serious and persistent recordkeeping problems and a material decline in financial condition.”
The amount of that cash assistance was not disclosed.
The OIG report said it terminated any further review of the $8.4 million Branch 6000 National Association of Letter Carriers (NALC) Credit Union in Amityville, N.Y.
The NCUA approved Branch 6000’s merger with the $83.4 million Consumers in Brooklyn, N.Y., during the third quarter of this year.
At the end of the second quarter, Branch 6000 posted a loss of $37,765 and a net worth of 3.23%, according to NCUA financial performance reports. In the first quarter, the credit union recorded a loss of $26,225 and a net worth of 3.17%.
At the end of last year, Branch 6000 had a loss of $270,730 and a net worth of 3.43%, NCUA financial performance reports showed.
The credit union fell below the 7% net worth threshold in 2020 when it posted a loss of $48,505 and a net worth of 6.09% at the end of that year. Even though Branch 6000 posted a gain of $19,572 in December 2021, its net worth declined to 5.79%, according to NCUA financial performance reports.
Branch 6000 was chartered in 1973 and served more than 1,500 members.