The NCUA is standing by its decision to limit bids for Autoland Inc., an auto buying CUSO, to only credit unions and CUSOs.
For more than three months, the NCUA had considered several bidders to buy Telesis Community Credit Union’s $4 million stake in Autoland. The financially troubled Chatsworth, Calif.-based cooperative was liquidated on June 1, and its assets were purchased by the $1.3 billion Premier America Credit Union, also located in Chatsworth.
In mid-June, Auto Solution Inc., a vehicle brokerage firm that works with more than 300 credit unions in Oregon, Washington and the Northwest, put in a bid to buy a portion of Autoland. Mark Loebner, owner of ASI, said the company’s request was rejected by the NCUA because the agency wanted to keep the bids limited to credit unions and CUSOs.
The latest update comes via a Sept. 6 letter to Lawrence Reichman, an attorney representing Loebner, from the NCUA, reiterating its current position.
“As you know, we limited bidding on Autoland to credit unions or credit union service organizations because we viewed that strategy as yielding the highest return and being in the best interest of the credit union industry,” wrote Michael McKenna, NCUA general counsel.
The Federal Credit Union Act gives the NCUA, as liquidating agent, broad discretion in determining how to dispose of the assets of a failed credit union, McKenna wrote.
“We relied upon our experience in liquidating assets and considered all available options,” McKenna said. “In the end, consistent with our broad discretion under the Federal Credit Union Act, we chose to limit bidding to only credit union related entities.”
Loebner seemed to accept the NCUA’s decision.
“I’m sure it is all but decided and anything now is just window dressing,” he said.
Frustrated at the lack of initial response from the NCUA on why Auto Solution was rejected, Loebner contacted his congressman, Rep. Suzanne Bonamici (D-Ore.), to voice his concerns. John Fairbanks, NCUA public affairs specialist, confirmed that it did receive a letter from Bonamici’s office and responded to it.
Joyce Flemming, a case worker with Bonamici’s office, was contacted by Credit Union Times to get more details on the letter exchange, but she did not provide any further information by press time.
In his letter to Reichman, McKenna wrote, “We appreciate your comments but are unwilling to reconsider our position for the reasons we discussed in our response to Congresswoman Bonamici.”
In August, the NCUA confirmed that a list of potential bidders in Telesis’ stake in Autoland had been reduced to a few serious considerations. At the time, price and terms were still being negotiated in order to ascertain the final bidder and value received. The regulator said it was looking to finalize a sale prior to the end of the year.
Meanwhile, Credit Union Times recently learned that one of the bidders that may be the top contender is a billion-dollar credit union in California. When provided with the name, the NCUA did not confirm if the cooperative was the final bidder being considered.
Formed in 1971, Autoland became a credit union-owned entity in 2007 through Telesis and two other California cooperatives, the $3 billion Kinecta Federal Credit Union in Manhattan Beach and the $29 million California Agribusiness Credit Union in Buena Park, through CU Vehicles LLC.