SAN DIEGO — Mission Federal Credit Union here announced a settlement over its purchase of Centrix loans bought as participations.
MFCU, saying it was one of the largest participating credit unions in the Centrix indirect auto loan program, reached a resolution with the Dallas-based Credit Union of Texas, one of the major originators of Centrix loans in the country. Credit Union Times referenced the dispute in a story on Mission's losses published the June 13 issue.
The credit unions jointly owned in excess of $90 million dollars in subprime auto loans, and Mission FCU then exercised its rights under the terms of the Loan Participation Agreements requiring that Credit Union of Texas buy back Mission's 90% participation interest in the Centrix loans, as the proper remedy for unintentional misstatements of fact.
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Mission Federal has now experienced two straight months of steady growth, the CU said, which will be further bolstered by this resolution with the CU of Texas. "We consider this a successful resolution for all parties," said Ron Martin, president/CEO of Mission FCU.
"We felt it was important for our member-owners and our financial institution that we extend ourselves beyond simply absorbing the losses, and actively pursued all remedies open to us, leading to this successful outcome," said Martin. Attorney Brad Pizer of Pizer & Associates in this matter represented Mission Federal.
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