The state’s credit union regulator on Wednesday confirmed a report that he has directed an unspecified number of Nevada credit unions to improve their financial condition.
George Burns, commissioner of the Financial Institutions Division, acknowledged that his office has sent letters of understanding and cease and desist orders to some state-chartered credit unions and ordered them to improve their financial strength. He declined to identify the credit unions that received the letters and orders.
His comments followed a report in trade publication Credit Union Times.
Credit union loans to businesses are a problem, but Burns said he is most concerned about car loans that are have gone bad.
Burns mentioned the Ontario, Calif.-based Credit Union Direct Lending Corp., which operates a program that allows dealers to provide credit union financing to car buyers.
Through the program, credit unions make loans for new and used cars available to members. The lender provides car lending services to 12 credit unions in Nevada.
The volume of CUDL transactions declined 50 percent to 75 percent over the last several months, partly because of the car dealerships closed in recent months, Burns said.
Bill Meyer, a spokesman for the car loan service organization, said credit unions nationally have a smaller percentage of car loans that are 60 days delinquent or more than other lenders.
Meyer didn’t immediately have figures for CUDL loans delinquency rates and CUDL loan volumes. The organization provides credit unions with training on loan underwriting and risk management but credit unions are responsible for the loans they make through the program, Meyer said.
Credit unions, which are owned by their members, can improve their financial balance sheets by reducing the number of new loans they make, boosting deposits and decreasing overhead expenses, Burns said.
Contact reporter John G. Edwards at firstname.lastname@example.org or 702-383-0420.