SAN FRANCISCO – Patelco CU has won the bidding to acquire the remnants of failed Cal State 9 CU, which has wracked up record losses over the last two years.
Patelco, which is based a few miles from the Concord headquarters of Cal State 9, will acquire the healthy assets of the credit union, including headquarters, branches and member accounts, while NCUA assumes the failed assets, mostly real estate loans, in a so-called Purchase and Assumption agreement.
NCUA tried to keep the failed credit union afloat temporarily with an emergency $100 million loan from the National CU Insurance Fund earlier this year.
Cal State 9 reported a loss of $61.6 million for 2007 as it was taken over by NCUA, then followed it up with a huge, $53.1 million loss during the first quarter of 2008. Over the past two years the credit union, chartered in 1948 to serve University of California employees, has lost almost a fourth of its asset base as members have rushed to withdraw their funds. The credit union had assets of more than $440 million in December 2006 and now has less than $340 million.
