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Patelco CU agrees to help stabilize Sterlent CU
SAN FRANCISCO, Calif. (5/30/08)--Patelco CU has stepped in to help the $100 million asset Sterlent CU, which has experienced credit quality issues the past year from home equity loan defaults. Patelco said the state regulator, the California Department of Financial Institutions, has been aware of Sterlent's problems and had been communicating with Patelco up to its move to assist. The Pleasanton, Calif.-based Sterlent reported a net loss of $5.5 million during the first quarter of 2008. Its credit quality issues stem from a home equity loan program it implemented in 2003. Current management ended the program in late 2006, said a press release from Patelco. "We share common roots, credit unions built by members from the telephone industry, so it isn't surprising we come together to help when problems arise," said Andy Hunter, CEO at the $4.1 billion asset Patelco, California's fourth-largest credit union. "As a much larger and more highly capitalized credit union, Patelco has the depth to provide Sterlent with additional experienced support and resources sorely needed in these turbulent times," Hunter said. "Patelco's role right now is to assist Sterlent's management team in their continued efforts to provide stable member services and stem future losses wherever possible, and that is what we intend to do," Hunter said. "I have every confidence that by working together, Patelco and Sterlent will focus on meeting the members' needs, as always." The announcement came less than a week after Patelco announced it will buy another credit union with home equity loan default problems, the Concord, Calif.-based Cal State 9. Both Cal State 9 and Sterlent suffered setbacks linked to the sinking residential real estate market in the area.
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