New Bankruptcy Law Claims FirstCU

CLARKSVILLE, Ind. - (10/17/05) -- Mounting losses brought on byincreasing member bankruptcies as the new bankruptcy law approachesare being credited with causing their first credit union merger.Community Service CU said Friday its board voted the night beforeto merge into nearby Obelisk FCU because of a $500,000 drop inmember equity and a major operating loss due to exploding memberbankruptcies. As of the first of this month, the $5.6 millioncredit union was facing a $286,000 operating loss and had totransfer $289,000 to loan loss reserves to cover losses frommembers filing for bankruptcy. Obelisk FCU, based in New Albany,Ind., has $55 million in assets.