Western Bridge Task Force Recommends Recapitalization
The Western States Corporate Realignment Task Force–formed to help decide the fate of Western Bridge–recently issued its report and recommendations about how to go forward in reconstructing the corporate FCU.
The task force restated that “the most viable and financially responsible option” would be a merger of Western Bridge and Members United Bridge. Recent NCUA policy statements against Tier 1 corporate mergers in particular took that option off the table. However, the task force stated, “NCUA should place less emphasis on the systemic risk of ‘too big to fail’ among corporates and greater weight on whether corporates are ‘too small to succeed.’”
A core belief of at least some task force members is that for corporates to move forward they will need substantial transactional volume, which the merger would have delivered.
The report continued, “The task force recommends that Western Bridge should move forward to apply for a new charter as a stand-alone corporate credit union. While recognizing that the proposed merger of the two Tier 1 corporates would provide the best option and should continue to be encouraged, the task force recommends natural person credit unions support the reconstituted Western Bridge by participating in its recapitalization and its services.”
Another factor in that recommendation is the foundational belief that “this support [of a stand-alone Western Bridge] is imperative in order to help retain a cooperative, unified, affordable system solution for credit unions of all types and sizes owned and controlled by credit unions.”
Upon issuance of the report, Chairman Dave Chatfield, former California league president, stepped down to be replaced as chair by Joan Opp, CEO of Stanford Federal Credit Union. Ken Payne, CEO of Freedom Credit Union in Provo, Utah, also left the task force.