BAKERSFIELD, Calif. – Self-Help FCU, the start-up community development sister of Self-Help CU, continued to grow by leaps and bounds with Friday’s acquisition of Kern Central CU, the first credit union failure of 2010.
Self-Help FCU, a federal charter created by North Carolina’s Community For Self-Help, has acquired four California credit unions – three of them troubled – since its founding 18 months ago, including El Futuro CU, a failed Porterville-based credit union last month, and now the one-time $40 million Kern Central CU.
Officials with Self-Help, the well-known CDCU which also runs the Self-Help Ventures Fund and the consumer lobby the Center for Responsible Lending, hope the California operations will help them expand their community development programs to the West Coast.
The California credit union is federally chartered and being run separately from the $360 million Self-Help CU that has carved out a major niche in low-income communities in its home state of North Carolina.
The group chartered the new federal credit union in 2008 with the acquisition of People’s Community CU in West Oakland, and followed it up with a deal for Community Trust CU in Modesto last year. El Futuro was an $8 million credit union chartered in the 1970s by United Farm Workers union activist Cesar Chavez to serve migrant farm workers in the region.
The latest deal will give the CDCU start-up almost $150 million in assets, 23,000 members and nine California branches.
Kern Central, chartered in 1974, had a $350,000 loss in 2008 and a $2.2 million loss for the first three quarters of 2009, leaving it with less than 1% net worth. The Bakersfield region has been particularly hard hit during the recession over the past two years, with high unemployment. The Self-Help deal was structured as a purchase and assumption, with NCUA assuming the credit union’s troubled assets.
"Within this challenging economic environment, the need to preserve access to responsible financial services for underserved communities is critical," said Steve Zuckerman, managing director of Self-Help’s California operations. "Kern’s strong management, experience, and tradition of promoting services for working families enhances our ongoing activity in this arena.
Under the P&A deal, Kern Central’s three branches will be operated under the name Community Trust CU.
