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Washington
Market conditions dictate pace of Norlarco bid approval
ALEXANDRIA, Va. (1/7/08)—Despite the National Credit union Administration’s (NCUA’s) desire to approve a successful resolution for the troubled Norlarco CU of Fort Collins, Colo., as soon as possible, broader market conditions are making that a longer process than at first expected, according to a source close to the situation. The agency continues to seek ways to preserve the assets of the credit union, but the condition of the real estate market is not cooperating with those efforts, the source noted. In a letter to members posted by the NCUA in November on the Norlarco Website, the agency indicated it expected to approve a purchase-and-assumption agreement by yearend. However, some observers now question whether January will witness a successful resolution of the conservatorship, although that timing is still possible. Three Colorado credit unions have submitted bids to acquire Norlarco, which was placed into conservatorship by Colorado state regulators in May after a number its construction loans issued in Lee County, Fla., became delinquent. In July, the NCUA took control of the credit union and removed its board of directors. Norlarco's delinquent loans total more than $65 million, according to reports. The interested credit union bidders are Bellco CU, Greenwood Village; Ent CU, Colorado Springs; and Public Service Employees CU, Denver, according to the The Coloradoan newspaper published Nov. 27. In December, John McKechnie, NCUA director of public and congressional affairs, acknowledged the bid process was taking longer than expected, but said the delay didn’t indicate a problem with the acquisition, but rather a "problem of timing." "We are making sure the acquirer gets a clean balance sheet," McKechnie said, restating the agency's goal of protecting the members' assets, keeping the acquisition costs down, and avoiding lawsuits. NCUA continues to negotiate with Norlarco creditors. McKechnie said Friday that the agency would not comment on Norlarco nor on the possible timing of a resolution of the conservatorship.


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