Unclear also was whether the management contract would lead to an eventual purchase-assumption merger or a temporary pact as well as exactly how the NCUA would parse out operation of the various CUSOs Telesis had pioneered over the years and what is being done about the bad assets.

There was also widespread discussion about how many of the state's largest credit unions had years ago or more recently rejected NCUA-extended bids to take over Telesis, which went into conservatorship March 23 at the request of the California Department of Financial Institutions.

"We took a look two months ago and decided it was not for us," said David Styler, president/CEO of the $3.1 billion Lockheed FCU of Burbank.

NCUA confidentiality rules limit discussion by potential bidders, but sources said that among credit unions invited to bid on Telesis were the $1.7 billion SAFE CU of North Highlands and the $1.6 billion Western CU of Hawthorne among others.

Asked about the complaints of NCUA's delay in acting on Telesis, an agency spokesman noted  that the decision to place Telesis into conservatorship was made by California's DFI, with DFI appointing NCUA as conservator. Telesis reported yearly losses since 2007, with $13 million the highest in 2008 and $4.6 million last year when its net worth dropped to 5.51% at year end.

Meanwhile, the Telesis debacle has triggered an outcry from the national banking lobby about credit unions getting over extended on business loans while enjoying a tax exemption. Still, CUNA along with leagues have worked vigorously to blunt the complaints before Congress as member business lending legislation gets pushed among lawmakers.

Nonetheless, there were any number of California credit union leaders who continued to bemoan both privately and publicly about the events at Telesis. contending they are an embarrassment and a dark stain on the credit union image.

"Without exception, the consensus has been the same. There is no equity and no value in Telesis and so excuse me for asking the question, What took so long for the conservatorship?" asked Stuart Perlitsh, president/CEO of the $316 million Glendale Area Schools FCU.

The potential losses to the system appear huge, he argued citing a year-end NCUA Call Report reflecting what he said are uninsured deposits exceeding $14 million.

"If this credit union goes into liquidation, these uninsured deposits are worthless," he pointed out. He added that Autoland, an auto-buying CUSO purchased years ago by Telesis along with other Los Angeles CU investors, has lost a large part of its value based on Call Report data. Perlitsh said Telesis bought Autoland for $12 million, and its value is now at $4 million.

Earlier criticism about the handling of Telesis was leveled by Charles Bruen, president/CEO of the $920 million First Entertainment CU of Hollywood, who called the conservatorship a sad day for the industry, eroding member and public confidence.  "This can't be good for any credit union," said Bruen.

Analyst Allen Carver, a former NCUA examiner who heads up an Atlanta consulting firm, without commenting directly on Telesis, said there remains any number of troubled credit unions like the Chatsworth credit union that need to be realistic about their future. In an overwhelming majority of cases, "CEOs and board chairmen refuse to acknowledge their situation and will not discuss merger," he said.