Federal regulatory agency intervenes, dissolves New Jersey-based financial institution due to financial instability.
The National Credit Union Administration (NCUA) has announced the liquidation of Unilever Federal Credit Union (UFCU), based in Englewood Cliffs, New Jersey. This marks the first credit union liquidation in 2025 [1][2][3].
The decision to liquidate UFCU comes following its declaration of insolvency by the NCUA. The agency cited that UFCU violated several provisions of the Federal Credit Union Act and NCUA rules, operating in an "unsafe and unsound manner." 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 [1].
The liquidation process will see the NCUA's Asset Management and Assistance Center contact individuals holding verified accounts in UFCU within one week. Members are required to contact the NCUA if they do not receive a letter within 10 days of the credit union's liquidation [2].
The NCUA's decision reflects broader systemic risks in the credit union sector in early 2025. Increased credit risk concerns and safety and soundness issues within the credit union system have led to intensified supervisory scrutiny. These concerns often involve poor asset quality, insufficient capital, or operational deficiencies that can lead to insolvency [2][3].
UFCU served about 1,450 members, primarily employees of Unilever's U.S. operations and its subsidiaries. Each account in UFCU is insured up to $250,000 by the NCUA's Share Insurance Fund [3].
In a related development, the NCUA board currently consists of only one member, Republican Chair Kyle Hauptman, following the dismissal of two Democratic board members, Todd Harper and Tanya Otsuka, by President Donald Trump [4]. Both Harper and Otsuka are suing Trump and other government officials over their "patently unlawful removal[s]."
The NCUA's Share Insurance Fund, with a total capacity of $22 billion, can backstop credit unions in the rare event of failure [5]. The agency has asked all creditors with claims to submit their completed forms and supporting documents by Aug. 28 [6].
Members with questions regarding their accounts can reach out to the NCUA's Asset Management and Assistance Center. The UFCU call report revealed an inefficient cost structure, with $1,052,747 in non-interest expenses and $111,089 in non-interest income [7]. The five full-time employees' salary and benefits were $700,000 in total, with an average of $140,000 each, nearly twice the peer average of $73,008 [8].
The NCUA has also issued two consent orders against credit union employees, prohibiting them from participating in the affairs of any federally insured depository institution [9]. The liquidation of UFCU underscores the NCUA's commitment to protecting the credit union system’s safety and soundness by intervening when a credit union cannot sustain viable operations.
[1] NCUA Liquidates Unilever Federal Credit Union, https://www.ncua.gov/news/ncua-liquidates-unilever-federal-credit-union [2] NCUA Identifies Systemic Risks in Credit Union Sector, https://www.ncua.gov/news/ncua-identifies-systemic-risks-in-credit-union-sector [3] Unilever FCU Members Urged to Contact NCUA, https://www.ncua.gov/news/unilever-fcu-members-urged-to-contact-ncua [4] Trump Fires Two NCUA Board Members, https://www.credituniontimes.com/trump-fires-two-ncua-board-members/ [5] NCUA Share Insurance Fund, https://www.ncua.gov/about/Pages/insurance.aspx [6] NCUA Asks Creditors to Submit Claims in Unilever FCU Liquidation, https://www.ncua.gov/news/ncua-asks-creditors-to-submit-claims-in-unilever-fcu-liquidation [7] UFCU Call Report, https://www.ncua.gov/resources/reports/call-reports/2023/unilever-federal-credit-union [8] Average Credit Union Employee Salary, https://www.creditunionsonline.org/about/industry-data/average-credit-union-employee-salary [9] NCUA Issues Consent Orders Against Two Unilever FCU Employees, https://www.ncua.gov/news/ncua-issues-consent-orders-against-two-unilever-fcu-employees
- The liquidation of Unilever Federal Credit Union has raised concerns within the general news and banking-and-insurance industries, as it underscores broader systemic risks and safety and soundness issues within the credit union sector.
- The NCUA's decision to liquidate Unilever Federal Credit Union following its declaration of insolvency and violation of Federal Credit Union Act provisions might have repercussions in various areas of finance and business, as similar issues could affect other credit unions.
- The criminal and justice sector may be indirectly implicated in the liquidation of Unilever Federal Credit Union, as the dismissal of two Democratic NCUA board members by President Trump, who are now involved in legal disputes, could impact regulatory decisions and oversight responsibilities in the finance and banking industry.
