Dive Brief:
- The National Credit Union Administration said Tuesday it has liquidated Marion, Illinois-based Aldersgate Federal Credit Union, which was placed into conservatorship last month.
- Aldersgate FCU violated several provisions of the Federal Credit Union Act and NCUA rules and regulations, including operating in an “unsafe and unsound manner,” the agency said.
- On Monday, the NCUA liquidated Middletown, Ohio-based Butler Heritage Federal Credit Union after its in-state peer, Cincinnati Ohio Police Federal Credit Union, acquired some of its assets and assumed Butler Heritage’s share accounts. Butler Heritage was placed into conservatorship in January.
Dive Insight:
This is the fourth credit union closed by the NCUA within a span of nearly two months. In April, the NCUA board liquidated Englewood Cliffs, New Jersey-based Unilever Federal Credit Union and declared it insolvent – the first credit union to be liquidated in 2025. The second was Austell, Georgia-based Soul Community Federal Credit Union on June 20.
For Butler Heritage, the NCUA said it decided to liquidate and discontinue operations "after determining insolvency was imminent, and the credit union had no prospect for restoring viable operations.” The NCUA said the same for Aldersgate, noting the credit union was already insolvent.
On June 18, the NCUA conserved Aldersgate and said it will work to resolve issues impacting the credit union’s operations, ensuring services continue uninterrupted.
Chartered in 1962, Aldersgate served 811 members and had $10.6 million in assets, according to its recent call report. Its members include ministerial and probationary members, full-time employees, local pastors, clergy persons and diaconal ministers under appointment of the bishop of the Illinois Great Rivers Conference of the United Methodist Church. Aldersgate member deposits are federally insured by the National Credit Union Share Insurance Fund up to $250,000.
Butler Heritage had roughly $9.7 million in assets and served 772 members located in Butler County, according to its latest call report. COPFCU has nearly $173 million and serves more than 10,000 members.
The NCUA and the Ohio Division of Financial Institutions provide stringent oversight and examination to ensure the safety and soundness of all credit unions operating in Ohio, a spokesperson for ODFI said in an emailed response. The members of Butler Heritage will experience a smooth transition to COPFCU and their accounts are insured by the NCUSIF, the NCUA said.
“Butler Heritage battled demanding market forces as do all small businesses,” Ohio Credit Union League President Paul Mercer said in a statement seen by Banking Dive, adding that its members will be “well-served” by the COPFCU.
The credit union closures come as the NCUA operates with a single board member. President Donald Trump fired NCUA’s now-former board members, Todd Harper and Tanya Otsuka, both Democrats, on April 16, leaving NCUA Chair Kyle Hauptman the sole board member at the helm.
Though the board can carry out its usual supervisory and enforcement duties with one member, it cannot vote to implement policy changes or approve new enforcement actions without a quorum of two members, the trade group America’s Credit Unions said after the NCUA board members’ termination.
Both of the fired NCUA board members are suing Trump and some other government officials over their “patently unlawful removal[s].”