NCUA Liquidates Former Feminist Southwest FCU
The NCUA on Wednesday liquidated the $2 million Women’s Southwest FCU of Dallas.
Originally chartered as Feminist Southwest Federal Credit Union in 1974, the 743-member cooperative served select groups that shared a common bond of women’s advocacy, interest and affiliation. The credit union also served an underserved area in Dallas and other affinity groups.
The $2 million credit union was mentioned in an acceptance speech at a National Federation of Community Development Credit Unions annual meeting in 2008, described as a “ripple of hope” in the credit union movement.
NCUA made the decision to liquidate WSFCU and discontinue operations after determining the credit union was insolvent and had no prospect for restoring viable operations.
WSFCU did have some capital issues, slipping below 7% net worth as of June 30, but improving that figure to 7.54% as of Sept. 30. However, loan quality was a big problem, with the credit union reporting a whopping 5.07% of total loans delinquent as of Sept. 30, up from just 0.27% one year prior.
The effect three loans can have on a small institution is painfully evident here. Nearly all delinquencies reported during the third quarter - $56,274 out of a total $61,228 worth of delinquent loans – is in the “other” category, likely coming from the credit union’s new and used auto portfolio.
The majority of the delinquencies are at least six months past due. Additionally, seven members are currently going through bankruptcy, affecting $73,397 in outstanding loan balances.
NCUA’s Asset Management and Assistance Center will transfer certain share accounts to the $260 million City Credit Union of Dallas. For non-transferred accounts, the agency will send checks to verified account holders within one week.
WSFCU is the 10th federally insured credit union liquidation in 2012.