Empire Corporate Aims to Help CUSOs with Capital Issues as Corporates Continue to Diversify Offerings

ALBANY, N.Y. - Corporates continue to find unique business opportunities in the industry. Last year Northwest Corporate broke ground by starting a new CUSO aimed at helping its credit unions serve business accounts. Empire Corporate is hoping to meet a new demand, CUSO services. As the number of CUSOs proliferate, Empire said it wants to help them deal with a common issue, capital needs. The corporate has launched a new line of loan products specifically designed to assist CUSOs with those unique capital needs. The products include an advised line of credit, a term line of credit, a warehouse line of credit, commercial real estate loans, and letters of credit. Diane Mahar, VP, Credit, for Empire Corporate said Empire has always had the ability to do these things, but the need wasn't there. "CUSOs weren't that big until a few years ago. They're much more common. We feel as these organizations grow, they're liquidity and capital needs are going to change," said Mahar. She said CUSOs have many financial hurdles, especially early on. Like any start-up new CUSOs need capital, they need revolving lines of credit for ebbs and flows in their cash flow positions, long-term capital for financing major purchases, and many other needs. For those CUSOs that are getting into buying credit union mortgages to help CUs free up liquidity or reduce interest rate risk, Empire's warehouse line of credit may be right up their alley, said Mahar. The warehouse line of credit essentially allows the CUSO to finance the purchase of mortgages on a short-term basis as they prepare to sell them in the secondary market. Mahar said as the CUSOs sell them off to the secondary market, the premiums they earn help them pay down the warehouse line. Empire has already had success with the warehouse line. The corporate recently provided iMortgage Markets CUSO, LLC-a wholly-owned subsidiary of First New England FCU -with a $2 million warehouse line of credit. Empire knows all about CUSO capital needs as it has an ownership interest in three CUSOs. Mahar said she thinks helping CUSOs with capital will become more common among corporates in coming years. -pgentile@cutimes.com