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SALT LAKE CITY (AP) -- Intermountain Credit Union is facing problems with its capital reserves and is seeking a merger with America First Credit Union.
At a special meeting set for Oct. 28, Intermountain's 6,900 members are expected to approve the emergency merger. Problems at Intermountain were revealed to depositors in a letter last week saying the credit union doesn't have enough income and capital to remain solvent.
"This (merger) has been a long time in the works," said Jeff Blackburn, Intermountain's president. "When we reached the point where we knew we were going to be facing some challenges with our real estate (construction) loans, we asked America First for their help."
America First is the state's largest credit union. It initially hoped to offer enough advice to help Intermountain stay afloat on its own, said Rex Rollo, chief financial officer for America First.
"They came to us a few months back with financial difficulties mostly related to their real estate loans," Rollo said.
But the credit unions soon realized a merger was necessary and Intermountain's board of directors approved the acquisition on July 31. The National Credit Union Administration and Utah Department of Financial Institutions followed with their approval earlier this month.
"We have approved the proposed merger with America First provided Intermountain's members give their consent," said Utah Department of Financial Institutions Commissioner Ed Leary. "We really believe it would be in their best interest to give their approval."
Leary said all credit union members in Utah can rest assured that their deposits are safe and are federally insured up to a point.
Earlier this year, Salt Lake Credit Union said it would combine with Mountain America Credit Union.
"It is becoming more difficult all the time for smaller credit unions to deal with increasing regulations and capital needs, while at the same time trying to provide their members with a growing array of services that are in demand," said Utah League of Credit Unions president Scott Simpson.
Information from: The Salt Lake Tribune
(Copyright 2008 by The Associated Press. All Rights Reserved.)
