Credit union in New Jersey is dissolved by National Credit Union Administration (NCUA)
The National Credit Union Administration (NCUA) Liquidates Unilever Federal Credit Union
The National Credit Union Administration (NCUA) has announced the liquidation of Unilever Federal Credit Union, based in Englewood Cliffs, New Jersey. This is the first liquidation by the NCUA in 2025.
Unilever Federal Credit Union, primarily serving employees of Unilever's U.S. operations and its subsidiaries, had approximately 1,450 members and around $46.6 million in assets. The credit union reported a loss of $134,891 at the end of 2023, followed by a loss of $336,490 at the end of last year.
The NCUA declared Unilever Federal Credit Union insolvent and has asked all creditors with claims to submit their completed forms, along with supporting documents, to the agency by Aug. 28. The specific reasons for the credit union's insolvency are not detailed in the available sources, but generally, such actions are taken when a credit union becomes insolvent and lacks prospects for restoring viable operations.
Factors contributing to insolvency in credit unions often include financial mismanagement, inadequate risk management, poor economic conditions, and operational inefficiencies. Unilever Federal Credit Union's call report reveals an inefficient cost structure with high non-interest expenses and low non-interest income. The five full-time employees of Unilever Federal Credit Union had a total salary and benefits of $700,000, which is nearly twice the peer average.
The NCUA has taken similar actions in the past, liquidating credit unions that operate in an "unsafe and unsound manner" or are insolvent. For instance, around the same time, Butler Heritage and Aldersgate Federal Credit Unions were also liquidated due to insolvency and the lack of prospects for restoring financial health.
Members of Unilever Federal Credit Union can reach out to the NCUA's Asset Management and Assistance Center with questions. Each member's account in Unilever Federal Credit Union is insured up to $250,000. The NCUA's Asset Management and Assistance Center will contact individuals holding verified accounts in Unilever Federal Credit Union within one week.
It's important to note that credit unions are committed to safety and soundness, with strong capital ratios and prudent business models. According to Curt Long, America's Credit Unions' chief economist, banks have failed more than twice as often as credit unions over the past two decades.
The NCUA board is currently composed of only one member, Republican Chair Kyle Hauptman, following the firing of two Democratic board members by President Donald Trump. The fired board members, Todd Harper and Tanya Otsuka, are suing Trump and other government officials over their "patently unlawful removal[s]." The NCUA declined further comment on the liquidation of Unilever Federal Credit Union.
The Share Insurance Fund, which backs the credit union industry, has a total of $22 billion. The fund is designed to protect member savings in the event of a credit union failure.
This news serves as a reminder of the importance of financial stability and prudent management in the operation of credit unions. The NCUA will continue to monitor the industry and take action when necessary to ensure the safety and soundness of federally insured depository institutions.
The liquidation of Unilever Federal Credit Union, a business primarily serving employees of Unilever and its subsidiaries, is causing questions in the finance industry about the management and soundness of credit unions. The NCUA's action serves as a reminder of the need for financial stability and prudent management, considering that similar incidents have occurred in other credit unions, such as Butler Heritage and Aldersgate.
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