Southeast Corporate Looks to Meet March 31 Deadline
Like other corporates, the $4 billion Southeast Corporate Federal Credit Union said today it is on target to submit its final business and capital plans to the NCUA by March 31. It continues to receive support from its member owner credit unions, it says, as evident from a webcast last week.
“Members will be asked to indicate their support via a nonbinding letter of intent,” said Brad Miller, Southeast Corporate’s President/CEO. “Through ongoing member communication, webinars and town hall meetings, we’ve laid out our strategy and have asked credit unions for feedback and with that input, we’re ready to put forward our final plans.”
Miller said member comments “generally have been positive, with many credit unions indicating they want to go forward.”
After NCUA’s review and approval of its business plan, Southeast Corporate will begin “confirming capital commitments, a process that is expected to occur within the May-July timeframe.”
“Credit unions rely on Southeast for key services, such as payment systems, liquidity and settlement, so preserving service continuity for them is vital,” Miller argued. “Automated settlement occurs so seamlessly that most don’t even think about it; but for many, it would be difficult to cost-effectively replace any of these programs.”
Miller’s comments came as both big and small CUs across the U.S. continue to weigh re-upping capital commitments to the corporates with an undefined number of CUs contemplating a switch to the Federal Reserve or other providers.
Michael Castellana, president/CEO of the $2.1 billion SEFCU of Albany, N.Y. which is a member of Members United Bridge Corporate, confirmed it has moved its “wire transfer processing, settlement services and security safekeeping” to the Federal Reserve Bank of New York and is “in the process of moving our check processing and ACH services.”
“Given our size, complexity and business model, our decision to move is not typical of all credit unions,” explained Castellana. “Each credit is unique and their choice of payments partner will be unique to them. As for my view of the corporate credit union system, I believe it to be critical for our industry and I am hopeful that when the transition to the new world of credit union system intermediary is complete that we can be a more active participant.”
One member of Southeast who had participated in the town hall meetings is James Woodward, president/CEO of the $262 million Sunstate FCU of Gainesville, Fla. He said capital costs figure in a pending Sunstate move to the Federal Reserve Bank of Atlanta for processing services. The comments of both Castellana and Woodward came in connection with their participation in meetings this month of the newly formed Community Depository Institutions Advisory Councils of the Fed district banks.
In its statement, Miller of Southeast stressed that “although credit unions are awash in liquidity today, the cycle will turn. Having a reliable way to obtain affordable liquidity, including lines of credit, will be critical.”
The priority, he continued, “behind our business and capital plans is to ensure Southeast’s ability to continue providing credit unions the economies of scale inherent in our cooperative structure.”