Royal CU Acquires Mortgage Servicing Rights from Failed Bank

Royal Credit Union has agreed to acquire the servicing rights of The RiverBanks’ mortgage loans.

The Minnesota bank regulator closed The RiverBank on October 7.

The transaction, which will take place on October 14, 2011, brings approximately 4,200 additional mortgage loans and members to Royal Credit Union. The outstanding balances of the mortgage loans are worth almost $600 million.

According to Mark Willer, Chief Operating Officer of Royal Credit Union, almost all of the mortgage customers of The RiverBank are within Royal Credit Union's field of membership.

"Less than 20 of the 4200 River Bank customers were outside our field of membership," said Willer. "Our Bylaws are being amended to specifically include these Riverbank customers within our field of membership."

The transfer is expected to be completed by October 17, 2011. The terms of the transaction were not disclosed.

While such bank/credit union transactions remain rare, this is the second transaction between Royal Credit Union and a bank. Less than a year ago, Royal Credit Union acquired 11 branches and 20,000 customer accounts from Anchor Bank.

Also, United FCU (St. Joseph, MI) has announced that it has entered into an agreement to purchase and assume the deposits and assets of Griffith Savings Bank.