NCUA Dusts Off Emergency FOM Exception for Alaska USA Merger
The $110 million High Desert Federal Credit Union offers membership to those who live, work or worship in Southern California's San Bernardino County.
How then, was Alaska USA's purchase and assumption of High Desert approved by the NCUA?
"It was an emergency merger, which is provided for under Title II of Federal Credit Union Act," said NCUA Director of Public and Congressional Affairs John McKechnie.
The provision allows the NCUA to combine dissimilar common bonds, he said.
San Bernardino County is home to some large credit unions, possible candidates to acquire High Desert. However, the region has been hard hit by home price declines and job losses.
The $950 million Arrowhead Credit Union reported a $28.6 million loss for 2008 and an additional $16.7 million net loss for first-quarter 2009. The credit union has long been recognized as a key business player in its hometown of San Bernardino but has seen its net worth decline from 10% in
March 2008 to 6% as of March 31, 2009.
The $905 million Altura Credit Union hasn't experienced such a dramatic drain on capital, holding steady at 7.26% net worth as of March 31. However, the historically robust noninterest income producer recorded a $13.8 million net loss for 2008 year end and another $2 million net loss as of March 31.
Conversely, Alaska USA reported a $13.7 million net profit for 2008 and attributed all of its first-quarter 2009 $6.7 million net loss to share insurance fund stabilization costs.
NCUA Region V Acting Director Jane Walters introduced High Desert members to Alaska USA in a letter dated June 18, posted on the credit union's Web site, www.hdfcu.org.
"I am pleased to announce that we have determined that Alaska USA Federal Credit Union will best serve your interests and will provide you with access to safe and sound credit union services," Walters wrote.
She told members that the Anchorage-based credit union will communicate directly with them soon and reassured them that Alaska USA offers online banking and participates in shared-branching networks.
An Alaska USA representative was not available for comment at press time.