FORT COLLINS, Colo. — Norlarco Credit Union was placed into conservatorship last July by the NCUA and owing to law in the state of Colorado it was kept quiet to ostensibly avoid a run-on-the-bank by worried members.

Chris Myklebust, state commissioner of financial services, had not returned repeated calls from Credit Union Times for several days, his office saying he was unavailable. Myklebust did speak with The Coloradoan, a local Fort Collins newspaper, however, saying that credit unions nationally are dealing with the subprime markets, but on a larger scale, "a lot of credit unions have done a good job of staying out of that market."

Norlarco posted a stupendous jump in delinquency in the 2-6 month category to $56 million in June from a mere $6 million at the end of March. Most of those loans are for out-of-state construction loans in Florida. The CU is named in a raft of lawsuits, six in Florida and one filed in Denver by Superior Choice Credit Union of Superior, Wis., claiming that Norlarco defrauded it into a participation arrangement. The suit alleges false representation and deceptive practices for failing to disclose documents, putting SCCU at financial risk.