Indiana credit unions are witnessing a pickup in new deposits and inquires from both their own members and bank customers following Friday's collapse of a venerable Indiana bank, the $2.7 billion Irwin Union of Columbus, which succumbed to large mortgage defaults.
"This sort of thing is unfortunate since they had been a pillar in this community, but the bank's troubles had been in the news for quite a while," said Nan Morrow, vice president of corporate development at the $850 million Centra CU, also of Columbus.
On Friday, the FDIC, citing previous cease and desist orders and calls to increase capital, seized Irwin Union along with its Louisville, Ky. affiliate and sold the good assets to First Financial Bank of Hamilton, Ohio. It was the 94nd bank failure of the year.
Irwin Union's troubles began receiving media coverage in Indianapolis and central Indiana outlets last summer and within recent weeks Centra "increased our safety and soundness in radio and print ads stressing that we have money to lend and member eligibility," said Morrow.
"I certainly would not call our advertising efforts huge but we do want to tell consumers that we're here to lend," said Morrow.
Irwin Union, with 27 Indiana and Kentucky branches, was stung by bad mortgage loans and has, according to news reports, tried for months to refocus its business from mortgage and home equity lending and equipment leasing to community banking.
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