CONCORD, Calif. – NCUA said it is soliciting bids from credit unions to acquire Cal State 9 CU, a once-$420 million credit union that failed last year under the burden of home equity loans that caused a $61.6 million loss.
Under the plan, outlined on the credit union’s website, NCUA will combine the healthy assets of Cal State 9 with another credit union and assume the failed loans, as it has done recently with several other larger credit unions, including Norlarco CU and Huron River Area FCU.
"This transaction, known as a "purchase and assumption," represents the most financially sound decision and is in the best interest of Cal State 9's membership," said NCUA Regional Director Melinda Love, in the letter directed at members.
State regulators took the failed credit union under conservatorship in October, then NCUA, by virtue of being Cal State 9's deposit insurer, took over control for the state the following month, and has been running it since then.
