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DEARBORN, Mich. — A loan participation that went south as part of the current mortgage and economic downturn is haunting a merger involving Michigan’s largest credit union.

The nearly $2 billion DFCU Financial Credit Union, headquartered in Dearborn, and the now almost $218 million CapCom Credit Union, headquartered in Lansing, announced their intent to merge last month. Like several other recent Michigan mergers, the move would leave DFCU as the surviving credit union but with a state charter. DFCU has been a federal credit union since its founding.

Some DFCU members have questioned the merger after they discovered from NCUA records that CapCom has dropped roughly $33 million in assets since June of last year. Then CapCom was almost $251 million and has since shrunk to its current size. Neither credit union mentioned the reduction in the merger announcement; CapCom explained that the decline was the result of getting caught up in a development loan participation in Florida that went bad.

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