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August 21, 2014

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Cumorah Credit Union seized by state regulators

Deposits and assets being acquired by Credit Union 1

Cumorah Credit Union was seized by state regulators on Friday, and American Share Insurance has been appointed as its receiver.

The credit union, with 15,000 members, had two offices in Las Vegas and two in Henderson. It had $147 million in assets and $129 million in deposits.

All deposits and assets are being acquired by Credit Union 1, a $574 million institution based in Rantoul, Ill.

“We want to assure Cumorah members that their accounts are protected up to $250,000 through American Share Insurance, a credit union-owned insurance fund,” said Financial Institutions Commissioner George Burns.

The Nevada Financial Institutions Division found that the credit union had poor asset quality, poor liquidity, inadequate earnings, was critically undercapitalized and had excessive loan risk.

Cumorah members will still be able to bank at their branches, and normal business hours will be kept at all offices. Members can access their accounts by writing checks or using ATM or debit cards.

Checks drawn on the credit union will continue to be processed as a normal course of business. Members with loans should continue to make their payments as usual, the state said.

Cumorah had a troubled asset ratio of 69.6 percent, according to BankTracker, a project by the Investigative Reporting Workshop at American University.

The ratio is determined by a number of factors, comparing its capital and loan loss reserves to loans no longer being paid.

“Due to inadequate capital and mounting loan losses, it was necessary to take possession of Cumorah Credit Union and appoint ASI as receiver to facilitate the merger with Credit Union 1,” Burns said. “We are committed to making sure Nevada’s financial institutions continue to be fundamentally safe and sound.”

The credit union was founded in 1965 and served members of the Church of Jesus Christ of Latter-day Saints living in Nevada.

Cumorah was the second credit union to be closed this year in Las Vegas, Community One Credit Union being the first.

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