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Washington
Norlarco buyer decision expected in January
WASHINGTON (12/12/07)--The National Credit Union Administration (NCUA) Region V director will post a “dear member” letter this afternoon on the Norlarco FCU website saying a decision will not be made on an acquiring bid until next month. Originally the regulator anticipated a purchase-and-assumption agreement would be approved by December, chosen from among three credit union proposals. However, according to John McKechnie, NCUA director of public and congressional affairs, the process is taking longer than expected. McKechnie said the delay doesn’t indicate a problem with the acquisition, but rather a “problem of timing.” “We making sure the acquirer gets a clean balance sheet,” McKechnie said, restating the agency’s goal of protecting the members’ assets, keeping the acquisition costs down, and avoiding lawsuits. NCUA continues to negotiate with Norlarco creditors. Norlarco became eligible for acquisition proposals after being place by Colorado state into conservatorship in May. That action was taken after the $334 million-asset, Fort Collins, Co.-based credit union was found to have a growing number of delinquent construction loans issued in Lee County, Fla. In July, the NCUA took control of the credit union and removed its board of directors. Norlarco's delinquent loans totaled more than $65 million. According to reports, Bellco CU, Greenwood Village; Ent CU, Colorado Springs; and Public Service Employees CU, Denver, have submitted bids to the NCUA. NCUA has not confirmed the identity of the bidders, but today’s members’ letter confirms that all three bidders under consideration are based in Colorado and have “a longstanding history of sound financial management and are federally insured by the National Credit Union Share Insurance Fund.” “We had projected the selection process to be complete in December 2007 and consolidation finalized in early 2008. We anticipate naming the winning credit union bidder in January; consolidation will be finalized soon thereafter,” says the letter signed by Region V Director Melinda Love, who also bears the designation “agent for the conservator.” One observer noted that due to the continued volatility in the Lee County market, bidders may be "dragging their feet" hoping for a better deal.
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