AUSTIN, Texas – The Texas Bankers Association has asked NCUA to allow Texas banks to participate in any auction for the assets of Texans CU, a one-time $2.2-billion credit union that has been run under NCUA conservatorship since last April.
In a letter to NCUA Chairman Debbie Matz, Eric Sandberg, president of the Texas Bankers Association, asks that local banks be considered eligible bidders for branches, deposits or other assets of the deeply troubled credit union, which reported negative $47 million net worth at year end and is being kept afloat only because of a $60-million emergency loan from NCUA. Texans is one of a handful of large credit unions that ran afoul of poor member business lending, creating $89 million in losses for 2011, $39 million in losses for 2010, $52 million in 2009 and a $44 million loss for 2008.
NCUA has been running another large credit union, Arizona’s AEA FCU, under conservatorship, after losses on its MBLs portfolio forced a federal takeover in December 2010. And last week NCUA took under conservatorship Telesis Community CU, a one-time $625-million credit union, because of growing losses on its large MBLs portfolio, one of the biggest in the country.
The solicitation comes as more and more credit unions are buying the assets of troubled banks, with at least two credit unions acquiring entire banks.
In his letter to NCUA's Matz, the TBA’s Sandberg says in light of a lack of credit union bidders for the failed credit union giant, NCUA ought to let bankers bid for the remains of Texans, formerly the credit union for Texas Instruments.
“In light of the apparent lack of eligible and/or interested credit union acquirers, what is the NCUA’s objection to expanding the list of potential bidders to FDIC-insured banks?” Sandberg said in a letter to Matz. “In this latter point, we anticipate there would be significant in-state interest in the 19 branches operated by the Texans Credit Union in North Texas and Austin area. As indicated in our previous correspondence, moving these branches and deposits to the taxable banking sector would also be of financial assistance to the government at this time of significant budget duress.”
“As the administrator of the (National CU Share Insurance Fund), is there not a fiduciary duty on the part of the NCUA to pursue the ‘least cost’ alternative in terms of resolving failed credit unions?” wrote Sandberg.
NCUA has rejected the request. “While we appreciate your interest on behalf of your member banks in acquiring deposits and branches of Texans Credit Union, we do not have any plan to merge this credit union at this time,” Matz responded in a letter to Sandberg. “NCUA has set no timeframe for completing this resolution process, but we are committed to moving as quickly as possible regarding these matters.”
