|NCUA Addresses Norlarco Worries|
FORT COLLINS, Colo. — September 19, 2007 - Aiming to calm jitters among Norlarco Credit Union members, NCUA sent out letters this week detailing reasons for the regulatory conservatorship, assuring depositors that funds are safe and claiming a path is being charted to restore stability to the beleaguered $269 million CU.
In the "letter to members" signed by Melinda Love, NCUA’s Region Five Director and Robert Hamer, president/CEO, NCUA blames the CU’s current problems on the faulty Florida construction loans made by previous management "which exceeded prudent risk levels."
The letter also reviews secrecy surrounding the May takeover by the Colorado Commissioner of Financial Institutions and the subsequent NCUA conservatorship as done to avoid spreading unnecessary member fear.
The Colorado agency acted so "as not to alarm members until regulatory steps were implemented to address the situation," said the letter. (CU Times)