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Patelco Credit Union Absorbs Cal State 9
POSTED ON BY Ken Tumin
It was announced yesterday that Patelco Credit Union will absorb Cal State 9 Credit Union. Cal State 9 was put into conservatorship under the NCUA in November 2007 (see post). The conservatorship resulted from Cal State 9's loss of $46 million on adjustable-rate mortgages that went bad in the first nine months of 2007.
I had done several posts on CD specials at Cal State 9. They were even offering some nice CD specials during the conservatorship (see post). I called Patelco today, and the CSR informed me that she believes those CDs will continue unchanged until maturity. She said these details will be worked out over the next week or two, so she wasn't 100% sure.
NCUA conservatorships seem to be a common practice for those rare credit unions that have problems. Under conservatorship, the NCUA runs the credit union to restore its safety and soundness. I have more details about conservatorships in this post. In December I reported on the acquisition of Huron River Credit Union by Detroit Edison after Huron River Credit Union was in a conservatorship (see post). One nice aspect of conservatorships is that they give members time to ensure their deposits are under the NCUA limits. I would not recommend depending on this since there's no guarantee that a credit union will always be placed in a conservatorship rather than just being closed.
I wonder if credit union acquisition was a factor in Patelco's decision to change to NCUA coverage in January (see post). It seems that their NCUA coverage now makes such acquisitions easier.
I had done several posts on CD specials at Cal State 9. They were even offering some nice CD specials during the conservatorship (see post). I called Patelco today, and the CSR informed me that she believes those CDs will continue unchanged until maturity. She said these details will be worked out over the next week or two, so she wasn't 100% sure.
NCUA conservatorships seem to be a common practice for those rare credit unions that have problems. Under conservatorship, the NCUA runs the credit union to restore its safety and soundness. I have more details about conservatorships in this post. In December I reported on the acquisition of Huron River Credit Union by Detroit Edison after Huron River Credit Union was in a conservatorship (see post). One nice aspect of conservatorships is that they give members time to ensure their deposits are under the NCUA limits. I would not recommend depending on this since there's no guarantee that a credit union will always be placed in a conservatorship rather than just being closed.
I wonder if credit union acquisition was a factor in Patelco's decision to change to NCUA coverage in January (see post). It seems that their NCUA coverage now makes such acquisitions easier.
I was having my CDs(under NCUA limits) during the convervationship, I didnt attempt to withdraw the CDs, eventually mertured and got my full money back. At this moment, no money left with them :-)