The $540 million Great Lakes Credit Union in Illinois has had a big year in mergers–four of them–and its latest of the long-troubled Federated Family CU provides Great Lakes' first entry into Wisconsin.

Vikki I. Kaiser, president/CEO of the Chicago-based Great Lakes CU, which has long served a former U.S. Navy base in the community, said her CU has the capital and the financial health to consider consolidating more Illinois or Wisconsin CUs provided there is a member fit.

The NCUA's Sept. 30 approval of Federated Family of Milwaukee marks the latest chapter in the fate of 24 Illinois and Wisconsin CUs that were investors in the bankrupt Central States Mortgage Co., an industry-run Milwaukee CUSO that collapsed in February 2009 after the housing bubble burst and subprime loans soured.

Federated told its members last April that it would be looking for a merger partner after writing off $1 million in losses due to the CSMC failure.

Under a consent order from state regulators following the CSMC collapse, Federated said its reserves had been depleted and that it hoped “that losses from CSMC would diminish as the bankrupt properties were sold, but that has not been the case,” adding that “indications are that losses will continue in the years ahead.” 

At least four other CSMC-investor CUs also sought out mergers in 2010 with a fifth and largest, the $137 million Prime Financial CU of Cudahy conserved by the Wisconsin Department of Credit Unions in 2009. But following the hiring of new management, Prime Financial emerged from conservatorship 10 months ago.

Regarding Great Lakes, Kaiser said her CU had been approached on the Federated merger, determining that it would work well considering both CUs share a similar member base of government employees, including those working for the Federal Reserve System in Milwaukee and Chicago.

Kaiser said she hopes to complete data conversion on the FFCU merger by Nov. 1. She added that her CU is open to other pairings by Illinois or Wisconsin CUs.