In an extraordinary appeal, the $6.6 million Mission SF Federal Credit Union is asking CUs to donate funds to help restore its capital and forestall an NCUA-engineered merger or liquidation.
In a Nov. 12 letter sent to CEOs of California CUs and fellow members of the National Federation of Community Development Credit Unions, the San Francisco CU said its call for $300,000 in donations was urgent in light of anticipated agency moves following its financial problems. The CU lost $234,000 in the first nine months and has had one of the higher delinquency rates among California CUs.
Salvador Duran, president/CEO, said he has already received some $20,000 in donations so far including a $6,000 grant from "our very supportive and generous benefactor," the $3.6 billion Patelco CU of San Francisco.
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Duran said he received some of the donations and pledges during the California/Nevada Credit Union League convention two weeks ago in Anaheim and is expecting more later this week towards an initial goal of $50,000 which he said will help the CU with the NCUA.
Acknowledging large loan losses on mortgages, Duran said the CU, chartered in 1971, has strived to support the immigrant and low income community in San Francisco and has repeatedly been honored for its work in this area.
Coming quickly to Mission's support was the $15 million Bethex FCU of Bronx, N.Y., whose president/CEO, Joy Cousminer, sent out a weekend letter arguing that small CUs, like Mission, continue to suffer serious losses from the corporate costs.
"We see our movement being decimated," wrote Cousminer as small CUs "are being forcefully drained to salvage the corporates." Cousminer is head of an ad hoc New York/New Jersey CU group, We Care, committed to helping small CUs survive.
But Charles Bruen, president/CEO of the $810 million First Entertainment CU of Hollywood, Calif., and a leading West Coast blogger, said he found the Mission appeal highly troubling considering the CU's record of making bad loans. And he also disputed the notion of blaming the problems on the corporates. He said he has yet to see a small CU failure "related to being decimated by the corporates."
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