Aiming to blunt negative fallout from Monday's closing of Milwaukee CUSO, Central States Mortgage Corp., the Wisconsin Credit Union League said the problems at CSMC are an anomaly as distinguished from a "healthy growing industry with a strong performance in 2008."
"Credit unions are managing the economic downturn in stride, making loans, are well capitalized and adding members at a rate one of the highest in the nation," said Chris Olson, director of communications for the league which has been reassuring media with a positive spin despite the surfacing of "bad news."
A league subsidiary has been counted as among the 25 Illinois and Wisconsin CU investors which have were asked by regulators to write off their CSMC stake at the end of 2008. The folding of CSMC Monday was apparently triggered by a funding crisis following the call on a $33 million defaulted note by Members United Corporate FCU.
The exact amount of the league's written off share in CSMC was not immediately known as other Wisconsin CUs, many in metro Milwaukee, have written off a total reaching $3 million.
Olson said the participating CUs in CSMC have already made adjustments "in their balance sheet but we want to assure the public that credit unions remain" a safe harbor.
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