New day, new credit union liquidation by NCUA
There were no credit union liquidations in 2024, but halfway through 2025 the NCUA has already closed four struggling institutions.
For the second time in 24 hours and the third time in the past 11 days, the National Credit Union Administration closed a credit union.
The latest: The NCUA Tuesday liquidated Aldersgate Federal Credit Union of Marion, Illinois.
Aldersgate was conserved by the regulator just two weeks ago.
Mark Treichel, former NCUA executive director and founder of Credit Union Exam Solutions, told Tyfone the action has all the hallmarks of likely fraud.
“[Aldersgate] reported zero delinquencies for years, which is a big red flag,” Treichel said. “To liquidate so quickly after conservatorship implies that there was zero likelihood that it could be saved, or even that the shares could be sold to another credit union.”
In general, the rising number of liquidations reveals that NCUA Chairman Kyle Hauptman is demonstrating his support for staff addressing some outstanding credit union cases that require resolution, Treichel said.
“While generally this authority rests with the regional director, there are costs associated with it that require briefing and/or blessing or approval by the board.”
The NCUA said the decision to liquidate Aldersgate FCU and discontinue its operations was made after determining the credit union was insolvent and had no prospect for restoring viable operations.
“The credit union violated numerous provisions of the Federal Credit Union Act and NCUA rules and regulations, including operating in an unsafe and unsound manner,” the NCUA said in a press release.
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Before this year, the most recent credit union liquidated by the NCUA was Inter-American Federal Credit Union of Brooklyn, New York, in March 2023.
Aldersgate Federal earned $33,500 in the first quarter of 2025 after having net income of $55,000 in 2024, according to call report data from the NCUA.
Aldersgate FCU served the ministerial and probationary members, full time employees, local pastors, clergy persons and diaconal ministers under appointment of the bishop of the Illinois Great Rivers Conference of the United Methodist Church.
The credit union had $10.5 million of assets and 811 members.
The NCUA Monday closed Butler Heritage Federal Credit Union in Middletown, Ohio.
Last week, the regulator liquidated Soul Community Federal Credit Union in Georgia just six months after it was chartered. The agency also closed Unilever Federal Credit Union of Englewood Cliffs, New Jersey, in April.
The number of federally insured credit unions with at least $10 million in assets but less than $50 million – including Aldersgate FCU – declined to 1,196 in the first quarter of 2025 from 1,253 in the first quarter of 2024.
Those credit unions held $31.6 billion in assets, or 1% of total system assets. Credit unions in that category reported an 8% decrease in loans over the year.
Membership declined 6.5%, while net worth edged up 0.8% for those 1,196 organizations.
“To liquidate so quickly after conservatorship implies that there was zero likelihood that it could be saved, or even that the shares could be sold to another credit union.”
– Mark Treichel
former Executive Director
NCUA
