The $44.5 million HUD Federal Credit Union in Washington, D.C. merged with the $2.5 billion Andrews Federal Credit Union in Suitland, Md., on May 5, according to a letter distributed to HUDFCU members obtained by CU Times.
The NCUA approved the merger in April, an NCUA spokesperson said. The federal agency declined to provide a reason for the consolidation due to confidential supervisory information.
"We are writing to share an important milestone in our history. To ensure you continue to receive the high level of service you deserve, HUD Federal Credit Union has officially merged into Andrews Federal Credit Union, effective today (May 5)," HUDFCU Board Chair Otis Collins wrote in the letter to members. "We chose Andrews Federal because they are a well-regarded institution that shares the same member-focused values that HUD Federal has upheld for years."
HUDFCU was chartered in 1940 and served the financial needs of employees of the Department of Housing and Urban Development, its HUD affiliates and selected employer groups. The credit union served 4,937 members at the end of the first quarter.
Collins did not say why the credit union board decided to consolidate with Andrews Federal or whether the 25% employee reduction at the Department of Housing and Urban Development contributed to the board's decision to merge. Last month, the Washington, D.C.-based National Housing and Rehabilitation Association reported 2,300 HUD employees were laid off, resigned or took early retirement since January under the Trump administration. The professional association, which focuses on affordable housing, said the employee reductions are facing legal, political and union challenges.
A review of HUDFCU's financial performance reports and some Call Reports showed the credit union has been losing money since 2011. That year, the credit union recorded a loss of $425,064 and continued to post six-figure losses from 2012 to 2015, according to NCUA financial performance reports.
Although HUDFCU showed a gain of $63,930 in 2016, it posted losses of $75,225 and $122,102 in 2017 and 2018, respectively. At the end of 2019 and 2020, the credit union returned to gains of $178,972 and $52,888, respectively.
From 2011 to 2020, the credit union's net worth declined from 10.23% to 8.17%, according to NCUA financial performance reports.
While the credit union showed a meager loss of $26,850 in 2021, it recorded much larger losses of $801,622 and $630,140 in 2022 and 2023, respectively.
HUDFCU's December 2022 Call Report showed its losses were driven by high non-interest expenses and credit losses, and weak fee revenue. Its non-interest expenses totaled $1,906,969 in 2022, up from $1,776,945 in December 2021.
About 38% of its non-interest expenses included $726,960 for professional and outside services, which exceeded the credit union's payroll of $655,111. HUDFCU's fee income also declined by 30% from $483,391 in December 2021 to $333,959 in December 2022.
HUDFCU also posted a credit loss of $613,678 in December 2022, compared to a credit loss of only $1,519 in December 2021. Delinquent loans (60-plus days) amounted to $340,197, while charge-offs cost $374,161 versus recoveries of $12,652, according to the credit union's December 2022 Call Report.
By the end of 2023, the credit union's non-interest expense had increased by 55% to $2,956,217, up from $1,906,969 at the end of 2022. HUDFCU's cost of professional and outside services increased to $951,288 from $726,960 in 2022, while payroll totaled $712,456 in 2023.
The credit union also paid $729,435 in miscellaneous non-interest expense in 2023, compared to $72,013 in miscellaneous non-interest expense in 2022 – an increase of 889%.
Even though the credit union's non-interest income increased to $529,222, it covered less than 20% of its operating expenses. Delinquent loans (60-plus days) amounted to $256,288, while charge-offs cost $187,686 versus recoveries of $21,281, according to the credit union's December 2023 Call Report.
HUDFCU lowered its losses to $169,277 in 2024 and $220,303 in 2025. In both years, the losses appeared to stem from continued high non-interest expenses of $2,008,768 in 2024 and $2,186,034 in 2025, NCUA financial performance reports showed. In both years, professional and outside services expenses exceeded $800,000, which also eclipsed the credit union's payroll, NCUA Call Reports showed.
The credit union's net worth declined from 7.50% in 2021 to 4.25% at the end of last year.
At the end of this year's first quarter, HUDFCU posted a loss of $34,837 and a net worth of 4.16%.
HUDFCU did not respond to email and phone requests from CU Times for comment.
In a prepared statement, Andrews Federal said the merger integration, led by a comprehensive framework, will ensure a seamless transition for HUDFCU members, who in the near future will have access to Andrews Federal's global network, including eight branches across Maryland, D.C., Virginia, New Jersey and overseas locations in Germany, Belgium and The Netherlands.
Andrews Federal's statement indicated HUDFCU's sole location on 7th Street SW will remain open with the same staff. At the end of the first quarter, the credit union employed eight persons.
"We are honored to welcome HUD Federal members and employees into our organization," Andrews Federal President/CEO Kenneth Orgeron said. "This merger is about more than just growth; it's about providing our new members with the tools, technology and financial stability they need to thrive in today's economy while maintaining the familiar, personalized service they expect."
Andrews Federal primarily serves military personnel and their families, select employer groups, Washington, D.C. residents and members of the American Consumer Council. The HUDFCU merger will increase Andrews Federal's membership from 153,258 to 158,195.
Peter Strozniak can be reached at peter.strozniak@arc-network.com.
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