The $1.3 billion Premier America Credit Union has contracted with the NCUA to manage the assets of the seized $318 million Telesis Community Credit Union. Both credit unions are based in Chatsworth, Calif.

The federally insured, state-regulated Telesis was seized March 23 by the California Department of Financial Institutions, which then passed conservatorship authority to the NCUA. The conservatorship put a damper on industry efforts to lobby Congress to lift the credit union member business lending cap, as Telesis failed due in part due to bad business loans. Banking lobbyists jumped at the opportunity to hold Telesis and the previously seized Texans Credit Union, which counts $60 million in subordinated debt as its only form of net worth, as examples of why business lending is too risky for credit unions.

Telesis has been bleeding since it ended 2007 with a $7.7 million net loss, according to financial performance reports posted online by the NCUA. At the time, the credit union had more than $600 million in total assets and 9.61% capital, but a 144% loan-to-share ratio, combined with a 2.37% loan quality index showed signs of trouble ahead. Net worth dropped each year, plunging to 5.51% by year-end 2010. Delinquent loans represented 11.34% of total loans as of December 31, 2010, and increased to 12.25% by year end 2011.

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