The NCUA Inspector General just confirmed that internal fraud drove two credit union liquidations last year.
Unilever Federal Credit Union in New Jersey was chartered in 1948. Served 1,448 members during its 77 years. Gone.
Aldersgate Federal Credit Union in Marion, Illinois. Chartered in 1962. Served pastors, clergy, and church staff of the United Methodist Church. Went from conservatorship to liquidation in less than two weeks. Gone.
Together, they accounted for $16.4 million against the Share Insurance Fund, which meant the members didn't lose their money. And if they had questions, just call the phone number on the form letter they received from NCUA. That’s how the system is supposed to work. Happily ever after, right?
Look closer.
Somebody at Unilever went to work every day alongside people who were stealing from the institution. Somebody at Aldersgate sat in a board meeting and reviewed financial reports that showed zero delinquencies across five years of lending, and nobody in the room said that doesn't make sense.
We talk about fraud in this industry in terms of losses and controls and examination cycles. Numbers, stats, charts and graphs, the end.
We almost never talk about it in terms of the human costs and consequences. We don't put a face on the member who has to explain to their spouse that their credit union doesn't exist anymore, the employee who wonders what they missed and what this means for their career, the board member who volunteered to guide a CU that was being hollowed out underneath them.
Those are stories that matter, but they've gone largely untold.
That'll change.
