CU SUPER PAC CANDIDATE LOSES CONGRESSIONAL BID
SAN BERNARDINO, Calif.-In a blow to both credit unions and Democrats, a former executive at Arrowhead Central CU failed the recent congressional primary to qualify for November's general election despite unprecedented support from credit unions' first "Super PAC."
Democrat Pete Aguilar, the mayor of Redlands and the former head of government affairs at Arrowhead, came in third in the non-partisan race in which the top two candidates qualify for the November contest. With 100% of precincts reporting, Republican Gary Miller, the current incumbent in the state's 42nd District and Republican State Sen. Bob Dutton, were the top two vote-getters in a redrawn congressional district widely expected to be won by a Democrat.
In the state's new non-partisan system, candidates from both parties run against each other in the primary and the top two finishers qualify for the general election, even if they are from the same party, as happened in the Aguilar race.
The final vote showed Miller with 26.7%; Dutton with 24.9% and Aguilar with 22.8%.
Aguilar's defeat came even after the California CU League created a so-called Super PAC, allowed to accept unlimited corporate donations, on his behalf and used it to finance get-out-the-vote initiatives and other campaign activities. The Super PAC, called Restoring Our Community, had raised $325,000 on behalf of Aguilar, $250,000 from an April 27 check from the California league, the rest from the San Manuel Band of Mission Indians, a 200-member tribe that runs a casino in near the city of Redlands.
There was good news for credit unions in other races, particularly the state's new 30th House district where Democrat Brad Sherman, who has emerged as one of the strongest congressional supporters for credit unions, qualified for the November election along with another long-time incumbent he was forced to run against, Democrat Howard Berman.
CDCU FEDERATION SUES MEMBER OVER LOST PRIDE
NEW YORK-In an unusual dispute, the National Federation of Community Development CUs is suing one of its members for non-payment of its PRIDE-the Predatory Relief and Intervention Deposits the Federation lends to its members to help fund anti-predatory lending programs.
In its suit filed in U.S. District Court for the Southern District of New York, the Federation says it provided Community Trust FCU, a $6.6-million credit union in Apopka, Fla., with a $250,000 PRIDE n July 2003, with interest of 5% a year. Under the agreement, the credit union owed the Federation $186,629 at December 31, 2011, but the tiny credit union has failed to pay any part of the principal due, creating an event of default on the agreement.
The PRIDE deal provides for late fees of 5% on interest payments more than 15 days past due, and 1% per month on payments of principal that are more than 30 days past due, according to the court records.
PRIVATELY INSURED ILLINOIS CU IS YEAR'S TENTH FAILURE
MATTESON, Ill.-The Illinois Division of Financial Institutions liquidated $40-million USA One National CU and the remnants of the privately insured credit union were assigned by its insurer American Share Insurance, to Credit Union 1, the Lombard, Ill., credit union that has been picking up privately insured failures the past few years.
USA One was the second credit union failure Friday, following California's Telesis Community CU, and tenth failure of 2012.
It is unclear what caused the failure because the president of USA One told members a January newsletter the credit union was well-capitalized with 10% net worth, but the Illinois regulator said it was "closed due to inadequate capital." Also, the financial data for the credit union had been taken off the ASI website.
Over the past few years Credit Union1 has also acquired ASI-backed failures Cumorah CU in Nevada and Elgin City Employees CU Illinois, and several other small credit unions to build its assets to $681 million.
CU CONVERT CONGLOMERATE SOLD TO BERKSHIRE BANK
SYRACUSE, N.Y.-Beacon Federal Bancorp, the $680-million regional bank created by the combination of five one-time credit unions, agreed to be sold to Berkshire Hills Bancorp of Pittsfield, Mass., for $132 million.
Beacon, chartered in 1953 as Carrier Employees FCU, serving the erstwhile air conditioning giant, was one of the first credit unions to convert to mutual savings bank in July 1999. After that the ex-credit union acquired four smaller credit unions upon their conversions to mutual savings banks: Professional Teachers FCU, Caney Fork FCU, Salt City Hospital FCU, and earlier this year, Marcy FCU, creating a regional savings bank with a diverse branch network in Syracuse, Tennessee, Texas and Massachusetts.
Berkshire Bank currently has 1.4 billion in assets and 68 branches in Massachusetts, New York, Connecticut, and Vermont.