NCUA seems to be treading carefully and purposefully in its policy on failed credit unions realizing current economic conditions are an "anomaly" with many more troubled CUs being handled by the agency, in the view of one successful CU suitor, the $941 million United Federal Credit Union of Michigan.

"It is apparent that not all parts of the country are suffering the same way, which demonstrates the diversity of the credit union movement and its ability to tackle these problems," suggested Gary Easterling, president/CEO of St. Joseph-based United FCU, which Sept. 25 submitted the winning bid in an NCUA-engineered purchase and assumption for the failed Clearstar Financial CU of Reno, Nev.

There's little doubt that NCUA and state regulators have their hands full in the distressed "sand" states, observed Easterling but "these are not normal times" for the agencies, he said. While the FDIC is well experienced in handling failures, they seem more unusual for CUs, he said. Nonetheless, as failed CUs occur, "it's not as though there's a running faucet here."

Still, NCUA by soliciting multiple bids and adopting networking procedures seeks out CUs "of sufficient size and expertise and looks farther afield than it has in the past" for suitors, said Easterling. That was the case when NCUA approached his southeast Michigan CU holding 12.5% capital and a multi-state structure to bid on the $141 million Clearstar.

The Reno CU, which had a 4.1% capital ratio at midyear, had suffered large loan defaults on real estate for months reporting a loss of $5.4 million for 2008 and $2.9 million for the first six months of this year.

Easterling said he expects to complete core conversion of the CU into United FCU by the first quarter of 2010.