Patelco CU Sheds Subprime Woes, Returns to the Black

SAN FRANCISCO – Patelco CU said yesterday it has erased the red ink that plagued it in 2006 and earned net income of $11.9 million for the first seven months of 2007. The privately insured credit union giant, in response to an article in yesterday’s Credit Union Journal Daily Briefing about its troubled subprime auto loans, said it holds no subprime consumer or mortgage loans. The $4 billion credit union, which reported an $8.3 million loss for fiscal 2006, said its net worth remains strong with $419 million in capital. Patelco, the nation’s largest privately insured credit union, sold its subprime auto loan portfolio after realizing some $40 million in losses. "Given today’s credit market, that move has proven to have been fortuitous, ahead of the economy," said Patelco President Andrew Hunter, in an email message. The subprime auto loan losses, similar to those being accrued by other credit unions, were notable because they were unrelated to subprime lender Centrix Financial, which have plagued dozens of other credit unions. Patelco sold its subprime auto loan portfolio to CompuCredit Corp., a subprime lender which had acquired ACC Consumer Finance, which was partially owned by Patelco.