CEOs from Catalyst, SunCorp and FirstCorp Expected to Court Northwest Credit Unions Looking for Alternatives to WesCorp

The CEOs of several established corporate credit unions are poised to provide services to as many as 60 regional credit unions that may be looking for alternatives to WesCorp. The corporate bridge failed to raise the capital required to emerge from conservatorship as United Resources.

Catalyst, SunCorp and FirstCorp will all be represented at the Northwest Credit Union Association’s (NWCUA) Convention and Annual Business Meeting, September 20-22 in Tacoma, Wash. Providers of check clearing and other related back-office services will also be represented at the Convention Trade Show. 

Representatives of SunCorp attended the Washington Credit Union League’s Business Meeting in 2010, during which contingency plans were discussed in the event corporate bridge failures would create a market disruption. SunCorp’s board of directors decided at that time to offer services to northwest credit unions.

SunCorp President Tom Graham expects to personally attend the NWCUA Convention to speak at a breakout session.

“Corporate credit unions have served as extensions of natural person back offices, saving them a lot of money and taking a lot of worry off their desks so they can focus on serving the needs of their members” Graham said.

Graham believes his corporate has been especially transparent with its members about losses and struggles during the financial crisis.

“From the first day, we have been extremely open with our members, providing them with all the information from my desk with regular member updates, in addition to a monthly financial review webinar,” he said. “Our members have known from day one what our risks, exposures and concerns were. This openness and focus has been rewarded by the new capital that our members provided.”

Catalyst, the new corporate credit union created by the expected merger of Georgia Corporate Credit Union and Southwest Bridge Corporate, will staff a booth at the Convention Trade Show. Catalyst CEO Diane Addington is making arrangements to attend.

Phoenix-based FirstCorp is already extending its services to other natural person credit unions in the West, and CEO Pete Pritts confirmed representatives will approach Northwest credit unions specifically.

“We are happy to be considered well capitalized and fully compliant with the new federal rules and regulations,” Pritts saids.

Notwithstanding the disappointment the industry has with the failed corporates, Pritts pointed out that 49 of FirstCorp’s 50 original members converted their capital.

“We passed several tests,” he said, “surviving for 30 years, getting through the severe economic crisis and meeting the regulator’s new standards.”

The National Credit Union Association (NCUA) conserved WesCorp in 2009 after the once-$34 billion giant fell to shaky investments during the peak of the economic meltdown. WesCorp failed to meet the NCUA’s capitalization deadline Wednesday.

Despite the circumstances, WesCorp is not giving up on its members in the Northwest.

A well-placed source shared the letter WesCorp is sending to its member credit unions.

“We will now seek a merger partner in order to continue the service to our members,” WesCorp management states. “We remain committed to deliver to you, for your consideration, an alternative plan to house the services you depend on. While such a merger may not necessarily result in a west coast-centric organization, the benefits of scale and consolidation will make it work.”

“Furthermore, there is no need to rush to invest in an alternative solution,” the letter continues. “I’ll repeat that last statement, as it bears repeating. There is no need to rush out and invest in an alternative solution.”


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Posted in Compliance News, MAXX Annual Convention.