NCUA liquidates Jackson Area Federal Credit Union, Five Star assumes members and shares

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NCUA liquidates Jackson Area FCU

Highlights

NCUA liquidates Jackson Area Federal Credit Union after insolvency and rule violations, transferring member accounts and some assets to Five Star Credit Union.
All affected Jackson Area FCU accounts remain insured by the National Credit Union Share Insurance Fund with coverage up to $250,000 per qualifying account type.
Jackson Area FCU, with 15,704 members and $60 million in assets, discontinued operations after NCUA determined reestablishing viability was impossible, shifting members to Five Star's $1.261 billion platform.

Liquidation and transfer terms

As reported by the National Credit Union Administration, Five Star Credit Union immediately purchases some assets of Jackson Area Federal Credit Union and assumes its share accounts as the failed credit union is liquidated.

The agency says all affected accounts remain insured by the National Credit Union Share Insurance Fund. That coverage protects individual accounts up to $250,000, joint account interests up to $250,000 in total, and IRA and KEOGH retirement accounts separately up to $250,000.

NCUA says it decides to liquidate Jackson Area Federal Credit Union after determining that the credit union is insolvent and violates numerous provisions of the Federal Credit Union Act and NCUA rules and regulations, including operating in an unsafe and unsound manner.

Mississippi credit union members shift to larger lender

NCUA says it places Jackson Area Federal Credit Union into conservatorship on May 6, 2026, and appoints itself as conservator while it works to stabilize the institution and address safety and soundness issues.

After several months of analysis and stakeholder engagement, the agency says it concludes the credit union has no prospect of restoring viable operations and discontinues its business. Jackson Area Federal Credit Union serves 15,704 members and holds about $60 million in assets, according to its most recent Call Report.

Chartered in 1953, the credit union serves employees of the City of Jackson, Mississippi, and Hinds County, including elected and appointed officials across 38 distinct groups that are primarily local government employees. Five Star Credit Union, a federally insured state credit union based in Dothan, Alabama, has 68,823 members and $1.261 billion in assets, according to its most recent Call Report.

In our earlier coverage of ConnectOne Bancorp’s affirmed credit ratings, we explained that the company and its main bank subsidiary kept stable ratings across key debt, deposit, and capital instruments after a routine surveillance review. We also noted that a stable outlook typically indicates no near-term deterioration in a bank’s credit profile, offering investors and counterparties continuity in their risk assessment.

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