Real Estate Loans, Economy Figured in First American Takeover: Faulty real estate loans plus southern Wisconsin’s high unemployment were key factors in the failure Wednesday of the $137 million First American CU and its subsequent FCU takeover, the state’s top regulator said Thursday.
The Beloit Wisconsin CU was taken over after the failure by First Community FCU headquartered in Parchment, Mich.
Situated on the border between Illinois and Wisconsin, First American had been on the NCUA and state watch list of troubled CUs for years “and that’s obvious when you see at the call reports,” said Sue Cowan, manager of the Wisconsin Office of Credit Unions.
The CU, chartered in 1933, had a part of base tied to a paper developing firm. It lost $5.6 million in 2009 and $1.1 million in the first six months of this year. Its net value ratio had leaved from 6.09% in June 2009 to 3.87% by June.
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