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NCUA is offering Cal State 9 for bidding
CONCORD, Calif. (3/7/08)--The National Credit Union Administration (NCUA), the conservator for Cal State 9 CU, is offering the credit union up for bid to be combined with another credit union. The $339 million asset, Concord, Calif.-based credit union was placed under the management of the NCUA in conservatorship in November 2007. “This week, NCUA representatives came to a decision to pursue the combination of Cal State 9 with another credit union,” wrote Melinda Love, NCUA Region V director, in a Feb. 29 letter to Cal State 9 members. “This transaction, known as a ‘purchase and assumption,’ represents the most financially sound decision and is in the best interest of Cal State 9’s membership. It will ensure that you continue to have high-quality financial services into the future without interruption,” she added. All prospective purchase-and-assumption credit unions have sound financial management and are federally insured by the National Credit Union Share Insurance Fund (NCUSIF), Love noted. She reminded members that all their deposits are safe and secure--insured by NCUSIF. The process is expected to be finalized in early summer 2008, Love wrote. Cal Sate 9 was unavailable for comment. Almost 98% of delinquent loans that prompted regulators to put Cal State 9 CU into conservatorship were real estate loans that were in arrears (News Now Nov. 6). In June, Cal State 9 reported delinquent real estate loans totaling $25.8 million, more than five times the $4.6 million it reported the year before (The Oakland Tribune Nov. 3). In first-quarter 2007, Cal State 9 earned $1.6 million; at the end of second quarter--about the time the subprime mortgage market began to realize it was in a crisis--the credit union had lost $9.1 million, said the newspaper, which examined the credit union's public filings with NCUA. Cal State 9 CU lost $45.9 million during the first nine months of 2007 with the majority of the losses occurring in mortgage loans, many with adjustable rates (News Now Nov. 9).
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