More credit unions enter conservatorship in 2021 after quiet 2020

On Nov. 5, California's Pomona Postal FCU was placed into conservatorship by the National Credit Union Administration, becoming the sixth U.S. credit union liquidated or placed into conservatorship so far this year, compared to just two in 2020 and two in 2019.

By comparison, no U.S. banks have failed this year, while four failed in both 2020 and 2019.

Two credit unions — Charleston, S.C.-based C O FCU and Indiana-based Indianapolis' Newspaper FCU — were placed into conservatorship earlier this year, but have since been liquidated.

In a conservatorship, the NCUA takes possession of the credit union in an effort to protect the National Credit Union Share Insurance Fund and work though issues regarding the credit union's safety and soundness. While some credit unions are later liquidated, others like Richardson, Texas-based Texans CU can labor for years under conservatorship before returning to member ownership. Texans CU was placed under conservatorship in April 2011 and returned to its members in June 2016.

Established in 1964, Pomona Postal FCU serviced employees at the Pomona Post Office and had 717 members at the time it was placed into conservatorship, according to the NCUA. The credit union lost money for the past three years and two of the three quarters in 2021.