Recapitalization Accounts Expected to Carry a Fail-Safe for Wary CUs
ATLANTIC CITY, N.J. -- While it's still in the works, the plan for potentially recapitalizing corporate credit unions will likely have a built-in fail-safe for credit unions wary of recapitalization.
In response to a question from attendees at the N.J. CU League's Annual Convention, Corporate One CEO Lee Butke revealed that the corporates would be meeting with the NCUA in the middle of October to work out some of the details of how to recapitalize the corporates if the membership decides that is what it wants. For those fearing a second failure, he explained that an "escrow-style" account would likely be the way recapitalization would work.
One thing was very clear to all: the credit unions are in control of the eventual resolution. A healthy resolution or consolidation "is only going to work if that's what the members of that corporate want it to be," Murray said. He commented that the corporates got away from their cooperative roots and that returning to them is what will bring the industry back together.
Butke and Murray said the NCUA's revised corporate regulation is definitely workable and the corporates are working together. However, the natural person credit unions will have to allow for a highly orchestrated wind-down over the next two years.