Fraud caused 11 of the 16 small credit union closures last year.What's more, these fraudulent cases cost the NCUSIF more than $12.5million in total losses, according to the NCUA.

But fraud cuts even deeper, given the loss of jobs andreputational damage it causes to the credit union industrynationwide.

Most if not all of these fraud cases could have been detectedearly or perhaps prevented had these credit unions maintainedfundamental internal controls, fraud experts said. In interviewswith CU Times, they shared fraud detection and preventionbest practices that any small credit union can leverage withoutsubstantially increasing operational costs.