Members regain Arrowhead Central Credit Union, seized in 2010
Three years after a controversial decision to seize Arrowhead Central Credit Union, regulators have handed control back to the members of the nonprofit, the Inland Empire’s largest credit union.
The San Bernardino financial firm “was on the brink of failing” when regulators took it over in June 2010, said Debbie Matz, board chairman at the National Credit Union Administration, which supervises federal credit unions.
Last week’s return of Arrowhead to its members “is an extraordinary success story,” the first credit union since 2007 to emerge from NCUA conservatorship, Matz said. The NCUA selected members of the private board that is now overseeing Arrowhead’s operations.
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The credit union, founded in 1949 to serve San Bernardino County employees, had expanded to offer membership to any resident of San Bernardino or Riverside counties. It has 116,000 depositors.
It had lost $28.6 million in 2008 as the financial crisis struck, an additional $47.1 million in 2009 and was heading for a 2010 loss of $4 million when the NCUA took it over, Matz said. Its net worth ratio, a gauge of strength that had fallen to 3% back then, is now 10.5%, she said.
Charles W. “Chip” Filson, a prominent credit union consultant whose clients had included Arrowhead, contended at the time that the regulators’ takeover was “arbitrary and capricious.”
Diana R. Dykstra, chief executive of the California & Nevada Credit Union Leagues, said Arrowhead had been a mainstay for many consumers in the area when the deep recession and foreclosure crisis struck.
“The Inland Empire was more heavily hit than many places,” Dykstra said. “For Arrowhead to be able to right their ship and have a regulator give the credit union back to the membership is a great day.”
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