Corporate Credit Unions Face the Fate of the 8-Track
Corporate credit unions are quite the unpopular kid at prom these days. With fresh allegations of fraud from senior executives at some corporates, dismal investment portfolios and lackluster capital positions, corporates are riding a wave of negative publicity. With massive changes to their business model on the horizon and the threat of further regulation, corporates face the same dilemma that the 8-track cassette tape faced: obsolescence.
Unlike 8-track, the popular audio cassette technology from the 1960s and 1970s, the corporate credit union system has not been short lived. However, forces are changing the marketplace, arguably making corporate credit unions much less relevant. In January 2009, the NCUA suggests making changes to nearly every key component of a corporate credit union's business model, including payment systems, liquidity management, field of membership, investment authority and capital structure.