Issuing an unusual appeal, the ailing the $6.6 million Mission SF FCU has asked CUs to donate funds to help restore its capital and forestall an NCUA-engineered merger or liquidation.
At last count Mission SF, a member of the National Federation of Community Development Credit Unions, had collected $20,000 toward a preliminary goal of $50,000 by year end, which it said would be enough to prevent imminent agency action.
In a Nov. 12 letter sent to CEOs of California CUs and fellow members of the National Federation, the San Francisco CU said its call for a total of $300,000 in donations was urgent in light of anticipated agency moves following its financial problems.
The CU lost $234,000 in the first nine months and has had one of the higher delinquency rates among California CUs.
Meanwhile, the extraordinary appeal was getting mixed reviews from other CUs both in California and elsewhere.
Charles Bruen, president/CEO of the $810 million First Entertainment CU of Hollywood, Calif., and a leading West Coast blogger, said he found the Mission request highly troubling considering the CU's record of making bad loans. And he also disputed Mission's contention that its problems were related in part to its high corporate expenses. Bruen said he has yet to see a small CU failure "related to being decimated by the corporates."
But Joy Cousminer, president/CEO of the $15 million Bethex FCU of Bronx, N.Y., and a leading voice supporting small CUs, sent out a letter suggesting that Mission, like small CUs across the U.S., are victims of the corporate meltdown. "We see our movement being decimated," wrote Cousminer, as small CUs "are being forcefully drained to salvage the corporates."
At Mission, Salvador Duran, president/CEO, said among the $20,000 in donations so far is a $6,000 grant from Patelco CU of San Francisco.
