ALEXANDRIA, Va. — The California Department of Financial Institutions has placed the $257 million Valley Credit Union into conservatorship and handed over the keys to NCUA.

NCUA will operate the credit union with a goal of continuing credit union service to the members and to ensure safe and sound credit union operations. Normal operations have continued under NCUA management.

The credit unions' assets plummeted from nearly $308 million June 2007 to below $257 million June 2008, according NCUA's figures. The capital ratio fell from 8.55% to 5.17% during the same period. Return on average assets was negative 4.22% as of June 2008 and has been negative since the September 2007 report.

Delinquencies were climbing among indirect loans, real estate, and participation loans. Charge-offs due to bankruptcy were 16.53% in the second quarter.

NCUA has assured that member accounts are insured to at least $100,000, while IRA and KEOGH retirement accounts are insured up to $250,000 by the NCUSIF. Excess insurance protection is provided by American Share Insurance of Dublin, Ohio.