Every now and then, Centennial Lending LLC will spot a gem butlately, the business and mortgage lending CUSO has had to turn downmany shoddy loans previously serviced by banks.

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Mark Bostock, president of the Denver-based CUSO, said with therecent shutdown of New Frontier Bank in Colorado, there's been anincrease in loans coming in. Local banks are capped out leaving aglut of development loans around. Centennial serves 123 CUs inColorado, Nebraska and Wyoming.

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"It's a scramble out there," said Bostock, who will speak onlending trends at a NACUSO annual conference session today. "Banksjust don't have the capital. Every once in a while, you'll get agem in the rough. But, I can see why some of the banks got intotrouble. The loans were not great."

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Bostock said with the bankruptcies and ongoing upheaval in theauto industry, credit unions can also expect to see a shutdown inauxiliary businesses. He predicts that rising unemployment willlead to an increase in strip mall closures and the demise of "momand pop" shops.

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"For us, we're seeing the bottom of the residential [loanslump]," Bostock said. "At the other end, we're starting to see thebeginning of the commercial loan defaults."

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