The $34 million First Service Credit Union of Milwaukee has become the latest victim of last year's bankruptcy of Central States Mortgage Corp., the Wauwatosa, Wis.. CUSO that got into trouble over subprime paper.
Under a so-called assisted transaction by the NCUA, the struggling First Service was merged at year-end into the $405 million Marine CU of Fond du Lac, Wis.
Terms were not disclosed, but an NCUA statement said First Service had been consolidated into Marine, effective Dec. 31. First Service had recorded an $827,000 loss for 2008 followed up by a reported $1.3 million loss for the first three quarters of 2009.
Originally chartered as Falk Credit Union in 1934, the merged credit union "changed its name to First Service Credit Union and converted to a community charter and at the time of the Marine takeover, First Service served members living and working in the Wisconsin counties of Milwaukee, Ozaukee, Washington and Waukesha," said the NCUA.
State regulatory officials said there have been six CUs of the original 28 southeast Wisconsin and Illinois investors in CSMC that have been subject to either conservatorship or merger.
The $161 million Prime Financial CU of Cudahy, one of the first CSMC casualties in February 2009, remains under state conservatorship but "is looking to emerge as a healthy credit union," said Suzanne Cowan, director of the Wisconsin Office of Credit Union.