The abrupt shutdown of Central States Mortgage Co., a Milwaukee CUSO, underscores the urgent need for credit unions to perform "full faith due diligence investigating third parties before jumping into this kind of business," Wisconsin's top CU regulator warned Wednesday.
Sue Cowan, director of the Office of Credit Unions, said her job now and that of other regulators including NCUA is on "how to fix the problem" and assess losses by the 23 Wisconsin shareholders plus two in Illinois.
Cowan, who is slated to meet Wednesday with CEOs of the participating Wisconsin CUs in CSMS joined by current management of CSMC, said discussion will focus on "what their future plans are" following Monday's shutdown of its Wauwatosa headquarters in suburban Milwaukee.
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