Latino CU in Phoenix Merges and a Texas CU Struggles
The latest to fall victim is the $3.5 million Chicanos Por La Causa FCU of Phoenix, which formally merged this month into another Latino CU, the $27 million Marisol FCU.
"Conditions could not have been much worse for a credit union whose members are involved in real estate construction and related fields," said Robin Romano, president/CEO of Marisol, who has been serving as interim manager for the struggling Chicanos Por La Causa since last July.
Meanwhile, the $86 million West Texas CU of El Paso is seeking a merger partner under a reported order of the NCUA. The credit union recently replaced its CEO while loan loss continue to mount.
Both West Texas CU and Chicanos Por La Causa are CDCUs, according to the National Federation of Community Development Credit Unions.
West Texas lost $8.9 million last year and had a 0.12% net worth ratio as of March 31. It lost $1.2 million in the first quarter, including loan losses and the NCUSIF stabilization expense. James Carlin was named by the NCUA as interim CEO, replacing former president Rufino Carbajal.
In Phoenix, Chicanos Por La Causa, founded by a Latino nonprofit group, lost $1.75 million over the past four quarters and wrote off 18.4% of its loans in the first quarter, which The Arizona Republic noted is "the highest rate for any Arizona credit union."
Chicanos, which at one time had $5.2 million in assets, has one branch with five employees.
No decision has been made on retaining the Chicanos branch. The resulting entity will have four branches, 24 employees and 8,400 members.
Romano said Marisol CU, while also retaining Latino members struggling in real estate jobs, is managing to turn a small profit this year after losing $317,000 in 2008.
"This is basically not a good market," said Romano, adding the only silver lining is that it is not getting any worse than it has been.