The $540 million Great Lakes Credit Union in Illinois has had abig year in mergers–four of them–and its latest of thelong-troubled Federated Family CU provides Great Lakes' first entryinto Wisconsin.

Vikki I. Kaiser, president/CEO of the Chicago-based Great LakesCU, which has long served a former U.S. Navy base in thecommunity, said her CU has the capital and the financial health toconsider consolidating more Illinois or Wisconsin CUs providedthere is a member fit.

The NCUA's Sept. 30 approval of Federated Family of Milwaukeemarks the latest chapter in the fate of 24 Illinois and WisconsinCUs that were investors in the bankrupt Central States Mortgage Co., an industry-run Milwaukee CUSOthat collapsed in February 2009 after the housing bubble burst andsubprime loans soured.

Federated told its members last April that it would be lookingfor a merger partner after writing off $1 million in losses due tothe CSMC failure.

Under a consent order from state regulators following the CSMCcollapse, Federated said its reserves had been depleted and that ithoped “that losses from CSMC would diminish as the bankruptproperties were sold, but that has not been the case,” adding that“indications are that losses will continue in the yearsahead.” 

At least four other CSMC-investor CUs also sought out mergers in2010 with a fifth and largest, the $137 million Prime Financial CUof Cudahy conserved by the Wisconsin Department of Credit Unions in2009. But following the hiring of new management, Prime Financialemerged from conservatorship 10 months ago.

Regarding Great Lakes, Kaiser said her CU had been approached onthe Federated merger, determining that it would work wellconsidering both CUs share a similar member base of governmentemployees, including those working for the Federal Reserve Systemin Milwaukee and Chicago.

Kaiser said she hopes to complete data conversion on the FFCUmerger by Nov. 1. She added that her CU is open to other pairingsby Illinois or Wisconsin CUs.