Corporate Failures Trickle Down To Healthiest CUs

COLORADO SPRINGS – Ent FCU, one of the best-run large credit unions, said yesterday that last week’s failure of U.S. Central FCU and WesCorp FCU will force it to take an additional  $7 million charge against its 2008 earnings, wiping out 90% of its net income for the year and leaving it with a net of just $2.6 million.

The latest charges result from funds the $2.6 billion credit union deposited in WesCorp and a second assessment it expects to pay to rebuild the National CU Share Insurance Fund as a result of the estimated $5.9 billion in losses it will suffer from the two failures.

Ent took a $16.3 million charge earlier this month against last year's earnings to pay a special assessment on all credit unions in the wake of NCUA's earlier $1 billion bailout of U.S. Central.

The charges total more than $23 million and reduced Ent's income for last year to $2.5 million, or down 90% from nearly $25 million in 2007. Ent originally reported record income for 2008 of $26 million.