The New York State Department of Financial Services placed the Yonkers Postal Employees Credit Union (YPECU) into conservatorship on Friday July 28th after years of financial struggles and declining membership.
The YPECU is a not-for-profit financial institution established 89 years ago. It hosts 486 postal worker members spanning Westchester, Putnam, Duchess, and Orange Counties. As of December 31, 2022, it held total deposits of approximately 5.25 million dollars.
A recent history of financial struggles
The credit union reported has been struggling in recent years. In 2019, it reported a net loss of $280,363, followed by $11,455 in 2020 and $32,504 in 2021. Although there was a small improvement in 2022, with a net income of $27,531, the losses persisted in the first and second quarters of 2023, with net losses of $33,378 and $47,724, respectively.
In addition to financial struggles, YPECU also saw declines in loans and membership. Between 2018 and 2022, loans fell by 12.85% in 2020 and 20.28% in 2021. The credit union’s membership dwindled by more than 6% in both 2019 and 2022, raising concerns about its long-term viability.
Compounding the credit union’s challenges, its tax-exempt status was revoked by the IRS on May 15, 2021, due to a failure to submit the required Form 990 for three consecutive years. The last Form 990 submitted by YPECU was back in 2017, according to IRS records.
The National Credit Union Administration (NCUA) has been appointed as the conservator. It will oversee the credit union’s operations and work towards stabilizing its financial health.
Member accounts at the credit union are safeguarded by the National Credit Union Share Insurance Fund. This fund provides insurance coverage for individual accounts, protecting them up to $250,000. Additionally, the combined interest of all joint accounts of a member is also insured up to $250,000. The Share Insurance Fund also offers separate protection for IRA and KEOGH retirement accounts up to $250,000.
Despite the conservatorship, member services will continue uninterrupted at YPECU’s main office in Yonkers. Members will still be able to conduct financial transactions, make deposits, access funds, process loan payments, and utilize shares throughout the conservatorship period.