The $1.3 billion Premier America Credit Union has contracted with the NCUA to manage the assets of the seized $318 million Telesis Community Credit Union. Both credit unions are based in Chatsworth, Calif.
The timing of criticism toward a regulatory proposal to limit loan participations to a certain percentage of a credit union’s net worth with the takeover of a California cooperative heavily steeped in the transactions may have created an ironic overlap.
How much risk is too much is just one of the questions looked at in this preview article from next week's print edition.
NCUA says federally insured, state-chartered credit unions represented 68% of all participations sold and 55% of participations bought.
With the recent takeover of Telesis Community Credit Union, the intricacies of the loan participation transaction are in the spotlight.
The NCUA announced Monday evening that the $1.3 billion Premier America CU would take over management of $318 million Telesis Community CU.
After years on a regulatory watch list, NCUA and the California Department of Financial Institutions finally pulled the plug last week on the $318 million Telesis Community Credit Union, placing the Los Angeles-based credit union into conservatorship. The NCUA was appointed conservator, ending a troubled saga.
Since at least 2010, Telesis Community Credit Union’s member business loan program has been in a downward spiral.
The NCUA has clarified that Autoland Inc., the auto buying CUSO co-owned by Telesis Community Credit Union, will continue to operate.
Business Partners LLC, the CUSO founded by Telesis Community Credit Union in the early 1990s, will continue originating and servicing loans, the NCUA said Monday.