Critic slams regulators for takeover of Arrowhead Credit Union
The government’s 2010 seizure of Arrowhead Credit Union triggered a war of words between regulators and their critics.
Regulators alleged the nonprofit was headed for ruin, sparking a backlash from those who insisted the San Bernardino institution was engineering its own recovery from the financial crisis.
With Arrowhead now back in control of its members, one prominent critic has released a broadside saying the National Credit Union Administration greatly exaggerated its problems.
The NCUA failed to account for the sizable reserves against losses Arrowhead’s management had established, enabling it to re-emerge with unparalleled financial strength, credit-union consultant Charles “Chip” Filson argues.
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The takeover severely hampered Arrowhead’s ability to serve its Inland Empire members in the middle of the financial crisis, writes Filson, whose clients had included the San Bernardino nonprofit.
“Lines of credit to businesses were canceled; loans that had been modified to help members were summarily written off; branches were closed,” he says in his critique.
“Employees who had struggled and sacrificed to put the credit union in a turnaround position were let go,” Filson writes. “The community and members are still paying today for this regulatory overreach.”
Debbie Matz, who heads the National Credit Union Administration, had called the return of Arrowhead to its members last month “an extraordinary success story.” It was the first credit union since 2007 to emerge from NCUA conservatorship.
The NCUA didn’t immediately respond to a request for comment.
The credit union, founded in 1949 to serve San Bernardino County employees, now offers membership to any resident of San Bernardino or Riverside counties. It has 116,000 depositors.
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