Business as Usual for Now at Corporate-Owned CUSOs
The CUSOs owned by the three corporate credit unions placed in conservatorship Sept. 24 remain open for business today.
"Those CUSOs continue to be open for business and their customers and will experience no interruptions in service due to Friday's action," said John McKechnie, NCUA director of public and congressional affairs.
Constitution Corporate Federal Credit Union, Members United Corporate Federal Credit Union, and Southwest Corporate Federal Credit Union were placed in conservatorship Sept. 24 by the NCUA. All were deemed undercapitalized, the agency said. The move makes way for the regulator's final corporate credit union rule.
Members United in Warrenville, Ill. wholly owns Balance Sheet Solutions LLC,a broker/dealer, and is a joint owner of CU Business Group LLC, a business lending and deposit services CUSO. In a message on its website, James Tolliver, president of Balance Sheet Solutions, assured clients that "
Our operations remain fully intact and fully operational."
SmartSource Solutions LLC is a wholly owned web services CUSO of Constitution Corporate in Wallingford, Conn. Southwest Corporate in Plano, Texas is a joint owner of CU Business Group.
In a web site message, Dianne Addington, acting CEO of Southwest Corporate, said "several alternatives will be evaluated to identify the best alternative to transition operational services."
"Members could also form a CUSO, pursuant to new regulatory requirements, to purchase the operations in tandem with another financial institution for settlement purposes, or an existing corporate credit union could submit a proposal to NCUA to purchase and assume the assets and operations of the bridge corporate," Addington wrote.
Last week, the NCUA Board voted to shift corporate CU CUSO authority to the director of the Office of Corporate Credit Unions. The board may have the authority to approve or disapprove a CUSO's activities if it goes beyond the scope of those listed in section 712.5 of NCUA regulations, the agency said.
While the bulk of the final corporate rules will become effective 90 days after they are published in the Federal Register, rules that impact CUSO activities will have delayed effective dates, according to the NCUA.