Extensive investments in collateralized debt obligations, unrealistic growth patterns that went unchecked and the failure of state and federal examiners to realize the risk of certain practices all helped cause the failure of Eastern Financial Florida CU.
That's the conclusion of the material-loss review conducted on behalf of the NCUA's Office of Inspector General by the accounting firm of Crowe Horwath.
The credit union had lost $149.2 million in its last two years of operation before the NCUA merged it into Space Coast Credit Union in June 2009, at a loss of approximately $40 million to the NCUSIF. Florida regulators had place the credit union into conservatorship in April 2009.
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