Sterlent Credit Union falls to mortgage crisis
Sterlent Credit Union, a 13,000-member state-chartered credit union based in Pleasanton, will be liquidated.
Sterlent is the second East Bay credit union to fail in the wake of the subprime mortgage crisis. The liquidation comes just weeks after Patelco Credit Union of San Francisco absorbed the troubled Cal State 9 credit union.
The California Department of Financial Institutions and the National Credit Union Administration ordered the liquidation. The NCUA will act as the liquidating institution. The NCUA entered into an agreement with Patelco to sell certain assets and liabilities of Sterlent to Patelco.
It is unclear what assets will be liquidated and what assets and liabilities will be sold to Patelco. Officials from the DFI could not be reached immediately to comment.
The NCUA’s National Credit Union Share Insurance Fund insures all credit union members’ deposits up to $100,000 per account.
At the time of liquidation, Sterlent had approximately $94.6 million in assets, down from more than $98 million at the end of March. In the first quarter, Sterlent reported a net loss of $5.5 million, mostly as a result of a $5.3 million loan loss provision.
At the end of March, Sterlent had $82 million in loans on its balance sheet, including $21 million in first mortgage loans and $36 million in other real estate loans and lines of credit.
The credit union reported $3.1 million in delinquent loans at the end of the first quarter, including $2.9 million in delinquent adjustable-rate real estate lines of credit, or home equity loans.
In February, the DFI and the NCUA issued a cease and desist order to Sterlent.
Sterlent was established in 1936 as EBTEL Federal Credit Union and became a state-chartered credit union in 2002.
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Tags: Home Equity Loans, Mortgage, mortgage crisis