LAS VEGAS – Texas credit union giant EDS CU, soon to be known as InTouch CU, picked up a potentially valuable franchise with its agreement to acquire the 8,000 member accounts and four branches of Ensign FCU, one of a growing number of large out-of-state credit unions picking over the troubled credit union carcasses here.
The $780 million EDS CU is one of several to obtain valuable Nevada credit union assets in recent weeks, as financial troubles are spreading like sagebrush through the state’s credit unions and banks.
Through the first three quarters of the year, all 13 of the state’s largest credit unions, and 23 of the state’s 27 credit unions have lost money. Four one-time $100 million institutions have being taken over by regulators.
Ensign is just the latest opportunity for interested credit unions. Before that, Utah’s America First CU acquired Community FCU, a one-time $180 million Las Vegas credit union and its five branches; Michigan’s United FCU acquired Clearstar Financial CU, a one-time $175 million Reno credit union and its four branches; and Credit Union One of Illinois acquired Cumorah CU, a one-time $185 million Las Vegas credit union and its five branches.
The ongoing financial crisis has provided opportunities for other large credit unions to enter new markets, too. Alaska USA FCU expanded into northern California by acquiring the remnants of two failed credit unions. Illinois credit union giants Alliant CU and CEFCU also expanded into California by acquiring failed or troubled credit unions.
Several other large credit unions are being asked by regulators to absorb troubled credit unions as a way to continue member service at the troubled institutions and limit the exposure to losses by the National CU Share Insurance Fund. “NCUA's primary focus is on making certain that the credit union member receives uninterrupted service in a safe and sound manner. We do not limit our search for a suitable acquiring credit union to a particular state,” said John McKechnie, chief spokesman for the agency.Ensign FCU, a one-time $145 million credit union that served The Church of Jesus Christ of Latter-day Saints, the Mormon Church, reported a $10 million loss for the first three quarters of the year and had negative net worth of $1.1 million at the end of the third quarter.
