RALEIGH, N.C.—Following substantial backlash and growing frustration from former Local Government FCU members after their June 2 merger into Civic FCU, the $3.5-billion CFCU is now experiencing the financial fallout—posting $75 million in losses over the first nine months of the year and seeing a sharp rise in loan delinquencies, Business North Carolina reported.
The problems follow the rocky June transition of more than 400,000 Local Government FCU accounts to Civic—a process whose glitches CUToday.info previously reported.
The credit union told Business North Carolina that the operational breakdowns during the June 3 “Civic Day” conversion—ranging from undelivered cards to inaccurate credit-score reporting—sparked an overwhelming volume of member complaints and contributed to a 10% drop in membership. Executives reiterated that many errors stemmed from data received from State Employees’ Credit Union (LGFCU had previously partnered with SECU), though SECU has pushed back, saying it first learned of those claims when contacted by the publication.
The latest financials paint a more sobering picture. Civic posted a $42 million loss in the most recent quarter alone, far exceeding its combined losses over the prior two years, the publication reported. Delinquencies have also surged: $211 million in loans—nearly 7% of the portfolio—were at least 60 days late as of Sept. 30, compared with sub-1% rates typical for most institutions. Leadership attributed the spike to Civic’s CDFI mission and a membership base with modest means, while noting that restructuring collections processes is beginning to stabilize trends.
Despite the setbacks, Civic maintains it remains “well capitalized,” with a net-worth ratio above 8%, which NCUA data show. Executives emphasized that frontline staffing has been boosted and that the organization is now focused on improving member experience after months spent untangling transition-related issues.
Civic FCU leaders told Business North Carolina they view this period as a painful but temporary chapter. While acknowledging higher-than-anticipated expenses and ongoing cleanup work, they said the long-term vision remains intact: building a digitally focused, differentiated financial institution capable of competing in a rapidly shifting marketplace.