In a rare failure for the credit union industry, federal regulators shut down Unilever Federal Credit Union of New Jersey on April 30 after deeming the small institution insolvent. The National Credit Union Administration (NCUA), which insures and supervises credit unions, announced it had liquidated Unilever FCU and discontinued its operations upon determining the credit union had “no prospect for restoring viable operations.” Member deposits remain safe – the NCUA reassured all 1,448 members that their funds are protected up to $250,000 by the federal Share Insurance Fund. Still, the closure marked a somber end for a credit union originally chartered in 1948 to serve employees of Unilever’s U.S. company in Englewood Cliffs, NJ. After 77 years of service, Unilever FCU’s members are now being directed to NCUA’s Asset Management Center for guidance on accessing their accounts and finding new financial institutions.

The failure appears to have been driven by mounting financial troubles and mismanagement at the credit union. In recent years, Unilever FCU racked up steep losses and an unsustainable cost structure. It reported a net loss of $134,891 at the end of 2023, followed by a deeper loss of $336,490 in 2024. An examination of its finances revealed an alarmingly high expense ratio – an 88% operating efficiency ratio, far worse than peer institutions. The salaries and benefits for its five employees averaged $140,000 each, nearly double the typical pay at similar-sized credit unions. These figures suggest that the credit union was overextending on overhead relative to its income, eroding its capital. In fact, regulators simultaneously issued prohibition orders against two Unilever FCU employees, banning them from working in any federally insured financial institution. This severe step indicates there may have been wrongdoing or unsafe practices contributing to the credit union’s downfall, though NCUA did not publicly elaborate on the individuals’ violations.

Unilever FCU’s collapse comes at a tumultuous time for credit union oversight. Notably, it was the first credit union liquidation of 2025, occurring just weeks after a shake-up in NCUA’s leadership. In mid-April, President Trump removed the NCUA’s two Democratic board members, leaving the agency’s three-person Board with only the Republican chairman remaining. (The ousted board members have since sued, challenging their unprecedented firing.) While NCUA officials stress that the insurance fund and supervision remain sound, the leadership turmoil adds an unusual backdrop to an already unsettling event. Credit union failures are infrequent – industry experts quickly pointed out that banks fail at more than twice the rate of credit unions over the long run. Still, for the Unilever employees and family members who relied on their company’s tiny credit union for generations, the closure hits home. Many now face the inconvenience of moving their accounts, and the loss of a familiar, tailored financial community. It’s a stark reminder that even longstanding credit unions are not immune to financial reality. Fortunately, the NCUA’s insurance and rapid intervention ensured that no member lost a dime of insured savings, even as their credit union closed its doors. Going forward, regulators and industry leaders will dissect what went wrong at Unilever FCU – from high expenses to oversight lapses – to reinforce the safety and soundness of other credit unions and prevent future failures.