OAKLAND, Calif. – NCUA announced yesterday it has liquidated troubled Kaiperm FCU and sold the remnants of the one-time $145 million credit union to Alliant CU, the $6 billion Chicago credit union formerly known as United Airlines Employees CU.
Alliant has been managing the failed credit union since May in an unusual arrangement with NCUA in expectations of winning the bidding for Kaiperm, the third large Bay Area credit union to be liquidated over the past three months, joining Cal State 9 CU and Sterlent CU.
Cal State 9 lost over $160 million over the last six quarters, by far the biggest credit union loss ever, and Sterlent followed up a $4.8 million loss for 2007 with a whopping $11.5 million loss for the first six months of 2008.
NCUA is also operating another area credit union, Valley CU, a one-time $310 million credit union in nearby San Jose, under conservatorship. Valley CU had a $6.9 million loss for 2007 and a $5.8 million loss for the first half of the year.
The Kaiperm deal gives Alliant, which has members in all 50 states but only 10 branches, a physical presence in the San Francisco Bay area, where it has more than 25,000 active members.
Kaiperm, which has heavy loan exposure to the region’s distressed real estate markets, recorded $3.8 million in losses for 2007 and $4 million in losses for the first half of 2008, and has seen its assets dwindle from $145 in 2005 all the way down to $91 million, as members have withdrawn their funds.
NCUA said it made the decision to liquidate Kaiperm and discontinue its independent operation after determining the credit union was insolvent and has no prospects for restoring viable operations.
Kaiperm was chartered in 1957 to serve employees of Kaiser Foundation medical facilities in the East Bay area of Northern California. Over time, the field of membership expanded to include numerous select employee groups.
