The Western States Corporate Realignment Task Force, formed to help decide the fate of Western Bridge Corporate Credit Union, issued its report and recommendations about how to go forward in reconstructing the corporate FCU.
The task force took this opportunity to restate that it favors a merger of Western Bridge and Members United Bridge as "the most viable and financially responsible option."
Recent NCUA policy statements against Tier 1 corporate mergers have effectively taken that option off the table. However, the task force took a swipe at the NCUA.
"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,’" the report said.
A core belief of at least some task force members is that for corporates to succeed going forward they will need substantial transactional volume, and a merger of Western Bridge and Members United would have delivered that.
"The task force realizes that currently Western Bridge and Members United Bridge appear to be precluded from merging by NCUA’s recently adopted corporate consolidation policy. The task force found that a stand-alone option (i.e., Western Bridge Corporate proceeding independently), while not the best choice, does have merit," the report said.
"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."
In recommending that natural person credit unions support Western Bridge in its go-it-alone configuration, the task force also urged them to ask Western Bridge for pro forma comparisons detailing costs of various item processing options (using a bank, going it alone, and do it yourself). In the task force’s number crunching, in the case illustrated, Western Bridge would offer the best value, a factor in the task force’s urging of support for Western Bridge as a newly chartered stand-alone corporate.
Another factor in that recommendation, made clear in the report, 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."
The task force comprises credit union leaders drawn from eight western states. Members are Dave Chatfield, volunteer chairman; Shane Berger, CEO of Beehive Federal Credit Union, Rexburg, Idaho; Ariel Chun, retired CEO of University of Hawaii Federal Credit Union, Honolulu; Rudy Hanley, CEO of SchoolsFirst Federal Credit Union, Santa Ana, Calif.; Mandy Jones, CEO of Oregon Community Credit Union, Eugene; Brett Martinez, CEO of Redwood Credit Union, Santa Rosa, Calif.; Frank Michael, CEO of Allied Credit Union, Stockton, Calif.; Gary Oakland, CEO of Boeing Employees Credit Union, Tukwila, Wash.; Joan Opp, CEO of Stanford Federal Credit Union, Palo Alto, Calif.; Ken Payne, CEO of Freedom Credit Union, Provo, Utah; Robert Ramirez, CEO of Vantage West Credit Union, Tucson, Ariz.; Wayne Tew, CEO of Clark County Credit Union, Las Vegas; and Jeff York, CEO of CoastHills Federal Credit Union, Lompoc, Calif..
Upon issuance of the report, Chatfield stepped down, to be replaced as chair by Joan Opp, CEO of Stanford Federal Credit Union. Ken Payne also left the task force.