CUSOs Strive for Normalcy Amid Corporate Conservatorship Frenzy
In 2003, WesCorp purchased equity shares in Business Partners LLC, a CUSO launched by Chatsworth, Calif.-based Telesis Community Credit Union. The member business lending CUSO has 180 CU clients and has serviced more than $1 billion in loans. Telesis President/CEO Grace Mayo said "there is no impact to Business Partners in regards to the recent events [with] WesCorp. [It's] business as usual."
Procura LLC, a payment solution CUSO and creator of the Purchase ONE Visa card, is owned by WesCorp, Credit Union Financial Services Limited Partnership, MEMBERS Development Company LLC and PSCU Financial Services. When asked about the CUSO's operations in light of WesCorp's conservatorship, media spokesman Walter Laskos said he had passed the question on to the NCUA and was awaiting a response.
While Portland, Ore.-based CU Business Group is owned by eight corporate CUs, neither U.S. Central nor WesCorp are among its owners. The business service CUSO serves 300 CUs.
"U.S. Central and WesCorp have no direct impact on CU Business Group's operations. For CUBG, it is business as usual," said Larry Middleman, president/CEO of CUBG.
If anything, the recent corporate conservatorships prove that risk analysis can ward off problems down the road, according to ALM First Financial Advisors LLC, which bought WesCorp's $1.7 billion investment book of business in 2006.
Dallas-based ALM First purchased WesCorp Investment Services LLC. Formed in 1995, the advisory group had 14 clients with $1.7 billion under management at the time of the deal. The acquisition gave ALM First more than $8 billion in funds under management and helped open key West Coast markets. Today, it manages $7.5 billion for more than 110 clients. WesCorp still maintains a minority board seat at ALM First.
"We've worked with other corporates in the country, usually for safekeeping and overnights," said Tom Manley, a partner with ALM First. "We don't have much impact due to the conservatorship."
In 2005, Eastern Corporate FCU sold its 100% ownership stake in ALM First to Manley, and the firm's other partners, Emily Hollis and Angela Calvert.
For the last several years, U.S. Central has been one of NACUSO's "platinum partners," contributing $20,000 each year to the industry group. However, it's still too early to tell whether the corporate's recent conservatorship will have an impact on the alliance, said Tom Davis, president/CEO of NACUSO. "There's a heightened need for industry unity and collaboration and cooperation," said Davis, "not a time for fragmentation.