Tuesday, April 3, 2012

Nonmember Business Loan Delinquencies

At the end of 2011, there were 829 credit unions that reported holding approximately $6.7 billion in purchased business loans or participation interests to nonmembers.

There were 121 credit unions that reported having at least one nonmember business loan at least 60 days past due. These 121 credit unions had $274 million in delinquent nonmember business loans for a delinquency rate of 4.08 percent. In addition, over 25 percent ($77.7 million) of all delinquent nonmember business loans have been in default for over one year.

The Credit Union of Texas reported holding the most delinquent nonmember business loans at $23.6 million for a delinquency rate of 47.54 percent. Other credit union reporting a large dollar volume of nonperforming nonmember business loans include Patelco with $18.2 million, Royal with $16.6 million, Premier American with $14.2 million and America First with $14 million.

See the table below for the 25 credit unions with the most delinquent nonmember business loans on their books.

There are 44 credit unions that are reporting that at least 10 percent of their nonmember business loans are 60 days past due. Nine credit unions report that more than half of their nonmember business loans are in default.


  1. see the table below for the most DELINQUENT...

    volume of nonperforming nonmmember ...nonmember...

    when in doubt try spell check!

  2. now that it appears premier america cu has received approval to take over tanking telesis cu of chatsworth & both have loads of non-performing business loans will things get better? while in middle school, high school and college it was a given adding 2 negative numbers together creates a bigger negative number. maybe the ncua is convinced there is some new math here. adding 2 negative credit union delinquent business loans together creates less bad. maybe this is the new normal. the premier america ceo john merlo - was a former wescorp fcu board of director and defendant in the ncua federal court lawsuit.

    1. Get your facts straight. Merlo, along with virtually all of the the former WesCorp Board members, have been released from the lawsuit. I do agree, however, that the selection of Premier America to manage Telesis is curious. It seems NCUA took the easy way out by finding a large credit union that is, as my mother so eloquently puts it when describing girls I dated in college, geographically desirable.

  3. I believe CU's really need to stick to what they know best, car loans, mortgages and savings accounts for people of modest means. I believe this mission was one of the reasons for them to exist. When they start trying to behave, pat their executives, and do business like their banking counterparts they generally seem to get themselves into trouble. This is especially true with those that overemphasized large MBL’s that are stressing their performance or sinking them completely. There is also something about the whole category on the 5300 reports for non-member MBL's that defies logic to me.

    1. Yeah, this poster is right! People should not be able to collectively poll their financial resources. That sounds un-American to me. I mean really, do those credit union people think the the "credit" part of their name means that they should be making loans to their members for provident and productive purposes like starting or improving their businesses? Worse yet, some of these credit unions are making larger dollar loans to successful business!

      I also agree with this poster that Credit unions shouldn't even offer checking accounts to consumers because they should just stick to what they know best...

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