Southeast Wisconsin credit unions, which lost millions in the March bankruptcy of Central States Mortgage Co., a CU-owned CUSO, and CU Fleet, a Milwaukee auto dealership, apparently have reached a settlement allowing them to recover claims totaling $82 million, according to local media reports.
In articles appearing this week, the Milwaukee Business Journal quoted the CSMC receiver and CU officials as saying a group of 24 CUs had recently reached an agreement that gives them control of $71.5 million in loans and lender-owned homes in the Central States Mortgage receivership, which went before a Milwaukee County Circuit Court last spring.
Central States was a Wauwatosa, Wis. mortgage firm with investors including the Wisconsin Credit Union League that closed in March and was 70% owned by credit unions, many of which also provided cash for a mortgage financing pool.
In the case of CU Fleet, in which CUs financed leases which went bad, the Business Journal quoted the court-appointed receiver, Michael Polsky of Milwaukee as saying he "anticipates recovering loans and vehicles totaling about $10.5 million."
"The CU Fleet news and the agreement in Central States' receivership means that Milwaukee-area credit unions might get some relief from the losses that have hammered their financial reserves the past year," said the Business Journal article.
Over the summer three small suburban Milwaukee CUs, all with losses tied to Central States, were quietly merged into the $1.4 billion Landmark CU, the state's largest. Earlier Prime Financial CU of Cudahy, also with CSMC loans, was placed into conservatorship by state regulators.
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