CONCORD, Calif. — The death rattle at Cal State 9 Credit Union here finally shook the California Department of Financial Institutions into action by forcing the insolvent CU into conservatorship and handing it over to the NCUA on Friday, Nov. 2.
Cal State 9 CU lost $45.9 million year-to-date and its net worth ratio at the end of September is -2.02% (it was 6.44% at the end of June). Delinquency is 7.31% and there is another $24 million in the 1-2 month category. Of some $24.4 million in total chargeoffs, $23.6 million is from real estate loans; the CU charged off $17.6 million in the third quarter alone. And the Real Estate Owned category (foreclosures) now stands at $10.2 million.
Late in the afternoon last Friday, with a prominently placed “Click here for important information” on Cal State's Web site, Region V Director Melinda Love and Acting CEO Judith Hurst informed members of the “recent developments.” Credit Union Times first reported the troubles at Cal State in June.
CEO Jackie Wong, who had been rumored several times to be on the way out the door now unceremoniously follows the CU's former Chief Financial Officer, Richard Headrick, the architect of Cal State's gamble on outsourced HELOC loans. Headrick left the CU sometime in October.
NCUA said it was looking for a merger partner or a bidder for Cal State 9.
Full details in the next issue of Credit Union Times.
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