Southeast Wisconsin credit unions, which lost millions in theMarch bankruptcy of Central States Mortgage Co., a CU-owned CUSO,and CU Fleet, a Milwaukee auto dealership, apparently have reacheda settlement allowing them to recover claims totaling $82 million,according to local media reports.

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In articles appearing this week, the Milwaukee BusinessJournal quoted the CSMC receiver and CU officials as saying agroup of 24 CUs had recently reached an agreement that gives themcontrol of $71.5 million in loans and lender-owned homes in theCentral States Mortgage receivership, which went before a MilwaukeeCounty Circuit Court last spring.

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Central States was a Wauwatosa, Wis. mortgage firm withinvestors including the Wisconsin Credit Union League that closedin March and was 70% owned by credit unions, many of which alsoprovided cash for a mortgage financing pool.

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In the case of CU Fleet, in which CUs financed leases which wentbad, the Business Journal quoted the court-appointedreceiver, Michael Polsky of Milwaukee as saying he "anticipatesrecovering loans and vehicles totaling about $10.5 million."

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"The CU Fleet news and the agreement in Central States'receivership means that Milwaukee-area credit unions might get somerelief from the losses that have hammered their financial reservesthe past year," said the Business Journalarticle.

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Over the summer three small suburban Milwaukee CUs, all withlosses tied to Central States, were quietly merged into the $1.4billion Landmark CU, the state's largest. Earlier Prime FinancialCU of Cudahy, also with CSMC loans, was placed into conservatorshipby state regulators.

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