In March 1985 CUNA filed a friend of the court brief to support the newly chartered Local Government Employees FCU. The charter date May 23, 1983. The North Carolina Bankers Association filed suit in 1984 saying the FOM violated the FCU Act.
As reported in March 1985 issue of Credit Union Magazine (page 25) the suit was filed after the state Supreme Court ruled that State Employees CU (SECU) could not expand its FOM to county and municipal governments.
CUNA argued that “NCUA has statutory authority under the FCU Act to interpret the common bond provisions of the Act, that its interpretation is consistent with the legislative history and legal precedent and that the State Supreme Court ruling against SECU is inapplicable in this case.”
Local Government FCU won. It became an operational partner with SECU providing back office and branch support. The two grew side by side for over four decades. Local Government had its own board and began to diversify from total integration with SECU, ultimately founding a digital only charter, Civic FCU , to expand its virtual presence and business options.
After Maurice Smith retired as CEO of Local Governement, the new leadership began exploring other options. SECU’s board may or may not have made a merger overture to the new LGEFCU CEO. It depends on whom you ask. The upshot was the Local Government merged with its much smaller digital dopplinger June 1, 2025 , kept the Civic name and then proceeded to end its operational dependence on SECU. No longer were Civic members being served through SECU branches after forty years of having access.
The Beginning of an End?
As the newly named Civic FCU began its independent existence, the transition has not been easy as noted in its July 24 website post. (link)
As it tries to build out its own delivery system the credit union has reported negative net income for the 2023 and 2024 yearends. But the losses have begun to hemorrhage at June 30, 2025 post SECU separation.
In every critical financial and operational indicator, Civic is going backwards. It reported a loss of $24.8 million versus a $9.2 million positive gain while working with SECU in 2024. Compared to June 2024 balances, shares have declined by almost $600 million to $2.9 billion; members have gone from 407,926 to 380,898 with loan originations (-47.3%)and total loans both declining.
Civic has borrowed $320 million at June 2025 versus just $80 million one year earlier. It is bolstering its net worth ratio with $52 million of subordinated debt. Its total assets have declined from just over $4.0 billion to $3.66 in the first six months of this year.
The only increase has been in employee headcount going from 319 to 431 since 2024 yearend as the credit union opened at least ten new branches.
How will this story unfold– a new era or is it the beginning of the end? Civic In its original incarnation was an example of operational, legal and cooperative ingenuity. It succeeded in expanding credit union services by showing the power of dual chartering-a state charter in essence sponsoring a de novo federal one.
Today that spirit has been lost. Civic is struggling to just become another traditional credit union in a state with intense financial competition. This strategy is using up the financial, reputational goodwill, and cooperative legacy that created a unique solution for serving their members. Will the CEO and board find their way back to creating special value for their member-owners who seem increasingly skeptical of this independence turn?