Delinquencies Soar, Capital Slides At High Desert

APPLE VALLEY, Calif.–High Desert FCU may need to change its name to High Delinquency FCU, as the picture continues to get uglier for the credit union seized by NCUA in October. High Desert, which was seized by regulators after problem construction loans ballooned, reported it recently laid off 16 employees—following 15 layoffs earlier in the year--and that its delinquency ratio has soared to 34.4%. Data shw that one-third of the loans in High Desert’s loan portfolio are 60 or more days late, and that it has lost $4.5 million as assets also shrunk to $140 million in November from $144 million in September—and $190 million in September of 2007. Perhaps most startling, the credit union’s capital has declined to 2.3%. Ken Chapman, who was brought in by NCUA as conservatorship CEO, told local media that steps to address problems in the CU’s construction loan portfolio are being addressed, but that housing problems in the overall market are affecting all institutions. That credit union said that former CEO Tom Brown is on administrative leave,  but did not provide additional information.