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News Now

Washington
Arrowhead Central CU placed into conservatorship
ALEXANDRIA, Va. (6/28/10)--Arrowhead Central CU, an $876 million asset credit union based in San Bernardino, Calif., has been placed into conservatorship "due to declining financial condition," announced the National Credit Union Administration (NCUA) Friday. By assuming control, the agency will continue credit union service to Arrowhead's 152,000 members and ensure safe and sound credit union operations, NCUA said in the announcement. Service to members continues uninterrupted, and member funds are federally insured up to $250,000 per account by the National Credit Union Share Insurance Fund. Arrowhead, a full-service credit union has provided financial service to people residing in the counties of San Bernardino and Riverside, Calif. The decision to conserve a credit union enables the credit union to continue normal operations with expert management in place correcting previous service and operational weaknesses, NCUA said. According to local media, Arrowhead was set to sell four branches this weekend to Alaska USA FCU, a transaction designed to bolster Arrowhead's financial condition. Beginning today, branches in Victorville, Barstow, Hesperia and Big Bear Lake were to switch ownership to Alaska FCU. Members served by those branches would have until Aug. 31 to decide whether to transfer their accounts to Alaska USA ( San Bernardino County Sun (June 25). The Barstow branch confirmed its sale was complete (DesertDispatch.com June 25). In addition, the Apple Valley Branch was to close, effective today. The branch was located in a grocery store, which did not agree to transfer a lease to Alaska USA. The sale would put Arrowhead's total branches at 19 and was expected to bolster Arrowhead's capital ratio to 4.3%, said the report. In March, Arrowhead sold its Sawyer Cook Insurance subsidiary for an undisclosed amount (News Now March 3). Arrowhead took several measures last year to raise its capitalization ratio, including closing four branches and laying off 60 employees (News Now Jan. 8, 2009). At that time Arrowhead CEO Larry Sharp told News Now that San Bernardino and Riverside counties had the largest foreclosure rate in the country. "Our credit union was not impacted by the subprime issues, but rather by the downturn in the economy that resulted from the subprime problems," he said at the time. There is 10% unemployment in our area that could reach 12% by year-end. Also the bankruptcy rate is up 125% now in our area. We don't know how deep this thing is."


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