PLEASANTON, Calif. — The HELOC loan program that saddled Sterlent Credit Union here with big losses making it insolvent were brokered by World Savings/Wachovia' Correspondent Brokers Network, Credit Union Times has learned. The $98 million asset institution posted a net income loss for the quarter ending in March of $5.5 million.

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Sterlent's has a net worth of -0.29%, making it insolvent, and is now operating under a management agreement with Patelco Credit Union of San Francisco. The California Department of Financial Institutions placed a Cease and Desist Order on Sterlent on February 20. But rather than place Sterlent into conservatorship, the DFI said, "DFI and NCUA are working together to best protect the credit union members' funds." Public Information Officer Alana Golden said, "DFI and NCUA determined that conservatorship was not necessary in this case. We expect full resolution in a timely manner. DFI continues to supervise Sterlent CU and the NCUA continues to provide primary insurance for members' shares."

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Patelco CU President Andy Hunter allowed that Sterlent "isn't flying along; they are insolvent, but the scale is dramatically different than with Cal State 9." Patelco has already announced its purchase and assumption of the ailing Cal State in Concord, following a bidding process about which Hunter declined to provide details.

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