More than a year after federal regulators seized control, Chetco Federal Credit Union will be liquidated Monday, with the assets and operations acquired by two neighboring credit unions.
Rogue Federal Credit Union, headquartered in Medford, will “purchase and assume” the five CFCU branches and memberships in Oregon, while Coast Central Credit Union from Eureka, Calif., will purchase and assume the Crescent City branch and memberships.
“We like to refer to it as a win-win-win-win,” said Rogue President and CEO Gene Pelham in an interview with the Curry Coastal Pilot. “It’s a win for the members, a win for the staff, a win for the credit union, and a win for the community. It’s a partnership that makes perfect sense.”
In typical banking protocol, the announcement from the National Credit Union Association came after the close of business Friday. The NCUA assumed control of CFCU from the member-elected board on Sept. 22, 2011.
All the CFCU branches will be closed Saturday and Monday, then reopen after the New Year’s Day holiday under the new brand on Wednesday. “Members will see the same friendly faces,” said Pelham. ATM use and online services will all remain in place while the branches are closed. “There will be no impact to members. All they will see different is a temporary sign on the door.”
The 67 employees at five Oregon branches will be retained as staff members of Rogue effective Monday, Pelham said. “Those jobs are secure jobs, the same as any other employee of Rogue Federal Credit Union.”
He praised the work of CFCU staff members during the NCUA conservatorship. “They’re tremendous people, and we’re really excited to have them.”
CFCU has undergone lay-offs during its management by NCUA. Pelham said NCUA’s interim CEO Gary Jester “worked really hard to right the ship …. get things stabilized.”
Rogue and Coast Central were the winners among credit unions invited by that bid for the CFCU assets and operations. Pelham said he did not know who the other bidders might have been.
CFCU was chartered in 1957. Its liquidation was the 14th such action taken in 2012 by the NCUA, an independent federal agency that regulates, charters and supervises federal credit unions.
In its September 2012 report, CFCU listed almost $259 million in shares and deposits, and total loans and leases outstanding of almost $253 million. The NCUA release said Chetco served 24,926 members as of Friday.
Pelham said Rogue is acquiring about $200 million in deposits and $160 million in loans.
According to NCUA, Rogue has nearly 56,000 members and approximately $583 million in assets. Coast Central is a state-chartered, federally insured credit union with almost 55,000 members and $960 million in assets.
CFCU was taken over “to resolve issues affecting the institution” on Sept. 22, 2011. The board of CFCU, elected by members, was terminated and the NCUA appointed Gary Jester as the interim chief operating officer.
At that time, CFCU board members told the Pilot that they had been working with NCUA examiners for 18 months on “course corrections.” Chief among them was CFCU’s ability to cover any loan defaults, particularly business loans.
During the two years leading to the take-over, the total of CFCU’s delinquent loans had jumped to 19 percent of all loans. NCUA reports listed CFCU as “under-capitalized” since the fourth quarter of 2010.
Pelham said the all-volunteer board at Rogue will also be seeking a “a good local candidate” from the coast to join the board.