The troubles of privately insured USA One Credit Union of Matteson, Ill. – which was merged out last week in a purchase/assumption deal arranged by state regulators and American Share Insurance Inc. – are linked to so-called private finance insurance loans which went sour, it was reported Thursday.

“This is a market that for years has been used routinely by banks and credit unions but for USA One they got hurt when the market collapsed,” explained Paul Simons, president/CEO of the $681 million Credit Union 1 of Rantoul, which emerged as the successful acquirer of the $38 million USA One following its May 31 liquidation by the Illinois Division of Financial Institutions. The regulator named ASI as receiver.

Private finance loans, said Simons, are often extended to high net worth individuals in connection with property and inheritance purchases tied to insurance policies.

“It's been a vibrant market for a long time but conditions changed,” said Simons whose downstate credit union offered to assume loans, deposits and other liabilities of USA One. USA One had 8,500 members and was based in a south Chicago suburb.

“It's really a very good fit for us since we have a major portion of our membership in the area,” said Simons, whose privately insured credit union for years has been actively acquiring ailing credit unions, particularly in suburban Chicago.

It was also named the winning bidder in October 2009 for the failed Cumorah CU of Las Vegas, also privately insured. Credit Union 1 now has 40 branches in Illinois, Indiana and Nevada. Its next branch, said Simons, will be in Oak Lawn, a southside Chicago suburb later this year.

Simons said there are no immediate plans to scout other merger candidates “since we have our hands full right now, and as always we want to make sure we do this one right and take care of the members.”

He said he expects the final conversion on USA One to be completed by Dec. 31.

Instant Insights /

Private Finance Insurance Loans Cited in USA One Credit Union Failure

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