Fraud killed almost all failed credit unions in Q2
This morning’s NCUA board meeting was a bit of a snooze, but there was one revelation that continues to be a thorn in the side of the movement.
When presenting the quarterly share insurance fund report, CFO Rendell Jones said of the 11 credit union failures during the second quarter, fraud played a role in 10 cases. In total, credit union failures have cost the fund $9.1 million; of that amount, 77% was the result of fraud.
The difference between the number of credit unions affected by fraud and the percentage of cost to the fund illustrates what everyone already knows: Fraud is more prevalent in small credit unions. Just yesterday, CU Times revealed how a woman stole $60,000 annually from a small credit union over 37 years, for a grand total of $2.4 million. How did she do it? The bookkeeper simply refused to let anyone else access the credit union’s financial database system – including the CEO! Good grief, talk about a lack of checks and balances. How in the world did the NCUA miss this for 37 years? This fraud was only revealed when the woman confessed to the credit union’s CEO.
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