APPLE VALLEY, Calif.-High Desert FCU was taken into conservatorship by NCUA, just one day after a credit union spokeperson told Credit Union Journal rumors of the impending move were unfounded.
NCUA said its Oct. 16 move to assume control of the operations of High Desert FCU was necessary to conserve the credit union's assets and protect the members. NCUA noted HDFCU remained open and members were free to make deposits, access funds, make loan payments and use share drafts.
"While the credit union was placed into conservatorship because of a declining financial condition, the decision to conserve a credit union enables the institution to continue normal operations with expert management in place," the regulator said in a statement.
Ken Chapman took over as conservatorship CEO on Oct. 17. When asked about the status of the credit union, Chapman would say only, "Business has been as usual at the credit union since the conservatorship."
According to NCUA, High Desert FCU originally was chartered in 1951 and serves those who live, work or worship in San Bernardino County, Calif. The credit union has $149 million in assets and serves more than 13,000 members.
As previously reported by CUJ [Aug. 18], High Desert FCU has had problems with delinquent loans in a distressed housing market. In March, High Desert instituted a moratorium on home construction loans in an attempt to clear bad loans from its portfolio.
As of June 30, High Desert recorded total foreclosed and repossessed assets of $3.3 million. As of July 31, that figure dropped to $2.4 million. As of Sept. 30, it moved back up to $3.4 million, meaning more foreclosures had hit the CU's books.
