Despite calls for corporate consolidation, small corporate executives told Credit Union Times they are not in merger discussions nor are they likely to merge.
Dennis DeGroot, president/CEO of the $864 million Missouri Corporate CU, said his cooperative will need to raise some new capital, and is still considering its options. However, a merger is not among them.
"I feel strongly that we can survive," he said.
Jeff Merry, chief financial officer of the $1.34 billion Volunteer Corporate CU, said his cooperative isn't in merger discussions either. In fact, he said VolCorp could meet new corporate regulations as currently proposed.
CUNA Chief Economist Bill Hampel, who was a member of the trade's Corporate Credit Union Task Force that recommended significant consolidation, said the main message wasn't that corporates need to merge, but rather that credit unions aren't willing to capitalize large balance sheets.
Small credit unions didn't have large investment portfolios, but he said they will miss the revenue U.S. Central's aggressive investment portfolio brought them.
"In the past they earned a high enough return from U.S. Central to do two things: pay attractive rates to their members and pay for the other costs of being a corporate credit union," Hampel said.
Credit unions don't fully appreciate the pricing they have historically received from corporates was subsidized by risk, he said.
