The National Credit Union Administration on Wednesday announced that the New Jersey Department of Banking and Insurance had liquidated First Jersey Credit Union of Wayne, N.J. and discontinued its operations.
First Jersey CU is the second federally insured credit union to be liquidated this year.
The regulator made the decision after determining that the state-chartered credit union was “insolvent with no prospect for restoring viable operations on its own.”
USALLIANCE Federal Credit Union of Rye. N.Y., immediately assumed most of First Jersey CU’s assets and loans and all member shares.
“Today’s action was taken to protect the members of First Jersey Credit Union and New Jersey’s consumers,” said Marlene Caride, acting New Jersey commissioner of the Department of Banking and Insurance. “All First Jersey member share balances will transfer in full and beginning immediately members will receive services from USALLIANCE.”
The Department also appointed NCUA as the liquidating agent.
NCUA assured that the new USALLIANCE FCU members should experience “no interruption in services” and that members’ accounts remain insured by the National Credit Union Share Insurance Fund.
At the time of liquidation, First Jersey CU had assets of nearly $86 million. The credit union provided financial services to members in Bergen and Passaic Counties and the underserved areas of Essex, Hudson, and Union Counties in New Jersey.
First Jersey CU posted a net loss of about $8.9 million in 2017, after recording a net loss of $4.3 million in the prior year. From 2016 to 2017, the credit union’s total loans and leases fell from about $72.6 million to about $58.6 million. The size of its membership fell from 10,710 to 9,045 over that period.
Meanwhile, USALLIANCE FCU recorded net income of about $11.6 million in 2017, up from $10.2 million in 2016.