FORT COLLINS, Colo. — Aiming to calm jitters among NorlarcoCredit Union members, NCUA sent out letters this week detailingreasons for the regulatory conservatorship, assuring depositorsthat funds are safe and claiming a path is being charted to restorestability to the beleaguered $269 million CU.

The four-page letter and fact sheet comes as the CU reported an11% erosion in its deposit base during the last month with agencyofficials maintaining such outflows are not uncommon following afailure of this size, one that has drawn intense mediacoverage.

In the “letter to members” signed by Melinda Love, NCUA's RegionFive Director and Robert Hamer, president/CEO, NCUA blames the CU'scurrent problems on the faulty Florida construction loans made byprevious management “which exceeded prudent risk levels.”

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