Eastern Financial Florida Credit Union

Eastern Financial Florida Credit Union, Miramar, FL, was closed Friday by the National Credit Union Administration.  The National Credit Union Administration has appointed Space Coast Credit Union to manage the institution’s day-to-day operations.

Eastern Financial, started in 1937 by 10 employees of the former Eastern Airlines, remains open for business as usual, said Linda Charity, a spokeswoman for the state Office of Financial Regulation.

The National Credit Union Administration has appointed Space Coast Credit Union of Melbourne to temporarily manage Eastern Financial’s day-to-day operations.

Options for Eastern Financial include an acquisition or liquidation, said John McKechnie, a spokesman for the administration that monitors credit unions. “We have not made any decision,” he said.

All Florida credit union members benefit from National Credit Union Administration deposit insurance coverage at least up to $250,000 per institution.

Eastern Financial, like many financial institutions nationwide, has been hammered by loan losses related to the sluggish real estate and the securities markets.

Last week, federal banking regulators ordered Coral Gables-based BankUnited, the largest bank headquartered in Florida, to merge with another institution or find a buyer.

Eastern Financial ranks among the top 35 credit unions in the nation.

It has operated as a state-charted institution since November 2001 and has 30 offices, all in Florida. The credit union has $1.6 billion in total assets and more than 200,000 members.

“It was just poorly managed,” said Ken Thomas, an independent banking analyst in Miami. “It was run not like a credit union and not even like a conservative bank, but like a high-flying bank making a lot of questionable loans.”

Eastern Financial had moved into commercial real estate lending, a risky venture for credit unions, Thomas said.
“This is a good reason why credit unions should be carefully scrutinized before they get into nontraditional areas,” he said.

For more information, contact the NCUA at 1-678-443-3000 or visit the NCUA web site.

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