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SAN DIEGO — Mission Federal Credit Union here lost $8 million in 2006, much of it due to Centrix Financial loans. The once soaring subprime auto lender whose Portfolio Management Program was halted by the NCUA’s Risk Alert in June 2005 went bankrupt and reorganized. But some credit unions are left with the consequences of having invested in a program that was touted as providing “improved yields” while covering risk through “A-rated insurance.”

Everest National Insurance, a provider of that insurance, has sued former Centrix CEO Robert Sutton and others alleging fraud and civil conspiracy and the outcome remains to be seen, but Mission FCU, which is certainly not alone, is now feeling the sting. MFCU reported a $6.1 million loss at year-end and later filed an amended 5300 report adding another $2 million in losses for the year. In the first quarter of 2007, MFCU had a loss ratio of 0.92%, double the peer ratio of 0.42%, lost $83,883 and charged-off almost $5 million. The $1.9 billion CU also shrunk in asset size by over $100 million in the final quarter.

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